SUSTAI CUT TINGE BUSIESS SOL4UTIONS EXTRACT.VE Å 11 N m Breakäing Thre~g Smart strategies for social impact, environmental preservation, and economic progress FC °'L'BAK °"U Volume 02 |February 2015 ..... ... . . . .... ... .... ... .. . . . . . . . .I Why SUSTAIN? .. ............ * How can businesses achieve and SUSTAIN stronger performance? How can they maximize profitability ....... ...while contributing to positive long-term impact on society and the environment? How do companies across the world, large and small, tackle sustainability challenges and how can they learn from each other? Moreover, how can IFC leverage its unique vantage point at the intersection of business and development to highlight fresh perspectives from pioneers and thought leaders from the private sector, as well as from governments, international organizations, and academia? These are some of the questions that have guided the creation of SUSTAIN, IFIC's print and electronic platform for sharing cutting-edge business ..... .....solutions with companies and partners across the world. About IFC IFC, a member of the World Bank Group, is the Largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle Ahaf min - Gana.the most urgent challenges of development. For more information, visit www.ife.org. ONewmnont Mining Corporation WHY SUSTAIN? Fbur21 CONTENTS * * ENGAGING FOR SOCIAL IMPACT 36 Full Circle . in I. Business Solutions I.Cutisi ou WORLD ECONOMIC FORUM 20 Small Company, Big Impact Why mining and metals companies need to SHAPING BREAKTHROUGH 52 GUINEA STRATEGIES AUREUS reduce, reuse, and recycle A Transformational Opportunity How smart community investments are 8 Reinventing Mining paving the way for long-term benefits in 38 Investor Pressure ANGLO AMERICAN Liberia ROCKEFELLER BROTHERS FUND How a diverse and unlikely coalition is Why a foundation built upon oil is divesting seeking to transform the industry 24 The Gender Contract from fossil fuels, and its potential impacts EXXON MOBIL Promoting economic opportunities for 40 A Watershed Moment women in Papua New Guinea INTERNATIONAL COUNCIL ON MINING AND METALS (ICMM) How collaborative approaches to water use can deliver benefits for all 26 GOVERNING FOR PROGRESS 54 PR Fighting Ebola 42 Trust in Disclosure SIERRA RUTILE LIMITED TULLOW OIL ProgreSS 12 How a mid-cap mining company* The business - and development - case for *is coping withanational health transparency Through Deliv ringcrisis mn Sierra Leone . Listening Shared Prosperity HARVARD KENNEDY SCHOOL'4 Three key steps leading extractive 28 A Spiritual Perspective companies are taking to address a INTERNATIONAL INTERFAITH complex arrayof sustainability challenges INVESTMENT GROUP (3iG) How the Church is engaging (and actually III. Knowledge Hu investing) in extractives 46 58 ACADEMIA 16 Partnerships Matter, PROTECTING THE ENVIRONMENT The Costs of Conflict in Good Times and Bad IlfrS'A e THE UNIVERSITY OF QUEENSLAND & RIO TINTO 30 Environment and Engineering: SHIFT / HARVARD KENNEDY SCHOOL Relying on partnerships to manage risk, share A Powerful Marriage OpportunityHow disputes with communities harm benefits, and create successful business PERU LNG profitability (and how to avoid them) outcomes How to address biodiversity challenges AURIZON through monitoring, restorations, and Delivering mixed-use infrastructure 60 COMMUNICATIONS 18 Face-to-Face with Civil Society innovative partnerships from Australia to Africa Going Digital WWF, NATURAL RESOURCES NEWMONT GOVERNANCE INSTITUTE, AND FUND FOR 34 The Roadto CleanerPower How social media is transforming theway PEACE TOTAL companies communicate Reflections on how to succeed in sharing the How a leading oil and gas company is making 50 Pricing the Promise gains ofoil, gas, and mining investments climate solutions a core business IFC 62 RESOURCES How the development potential of the Trans- Tools Gabon railroad can finally be realized Publications 2 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS CONTENTS/February2015 3 BY@itc Mary Porter Peschka Acting Director, Cross-Cutting Advisory Solutions,IFC Bernard Sheahan teefre?Ta stecnrlqeto eepoe IChsivse net Director Infrastructure and Natural Resources, IFC Et rati e . e s l m r ej 2 o6 a 6 than 80%n ofe theeorlLsoeerg needs. They p v raw m r ae l sv 6. ..... 6stakeholder engageme . for everything from food products to medicaL equipment, to sunscreens,deosrtdTagtdspottwmnalohp, EDORAEM to smart phones. They aLso have great transformative potentiaL: a Dne further 540 miLLion peopLe couLd be We tcmst niomna edrhp edr a Lifted out of poverty if oiL, gas, andlermuhfothexrinefcmpisschaMngr mineraL reserves are deveLopedanretrto,ofrmTtlaitbcesaedng (t Mrkl effectiveLy.plyrisoapoe.Nwisgtaralomrin fro the Ineatol Coni of Miin an Metals'* Yet the challenges to delivering on the industry's great apoc owtrseadhp n h ol promise are tremendous. Technical risks are growing significantly as exploration for deposits moves deeper Tasaetgvrac sas udmna o and higher. Non-technical risks are equally daunting. u 4 ~~~~~~~Companies must manage what are often large-scale, opruiist eeo rtclifatutr.A rdc longs-lastings changes to communities and ecosystems.tharilonGnesow,cnggtecusefVlre Meanwhile, in places where conflict and corruption teeooywl eedo odgvrac n prevail, governments must find ways to effectivelysteghnnloacaaityInPr,pgesveCaieDrcinad deploy the wealth created by the activities of oil, gas,goenne-adssivepracsbyomnes CeyMPronNt and mining companies. - New forces raise the bar for extractive company success. cutysefrst civ outadicuiegot.O H OE Market conditions are weakening as the prices of commodities and oil fall sharply, something that affects smaller companies in particular. Meanwhile, public cmaiscnadeswa,i aysne,ae@ef rw expectations are rising for the industry to play a strongexsntaprsus.Tectigdesotosad development role and to generate societal benefits. prpcie hrdhr r loueu o opne Companies are also under increasing pressure - frominohrscrslkngtsuedinarsig both investors and campaigners - to help the worldcopescilenrnmta,ndgvnne moveto lowcaron conoy.movleingaemuhl mor fiusive diretinaeeinto b foautdo new patnrhis even with as ExxonMobil's.* wor in Pau Ne Guine shws In proect fo ovr50 yars.Asof un inetrciesttae 2..itin We6alsowork wth.clints tofurthe enhnc th dveopm ntim actofou 66 . .projects through6adv6s6r6 programf *on community investment,.loca 6ourcing, public private partnerships * 6. * *I * 6reven6ue6management,* water . * .stewa66ship,.communica6ions,6and 6.~ 6 * 6 6 6s6akeholder.6engagement. 6~ * * * * 6 6* *EDITORIAL.6 TEAM Chief Editor- plaerinsoarpoer Nw isiht ae ls eerin fro th Inentoa Coni of Miin an eas appoah6t wte stwadshp,an6th6Wrl Economic36 6 Fou' work to prmt sutial mining * ** * 66. * IManaging.6Editor: * 66** .~ 6 6.. 6Emmanouela. 6(Emmy)6 6 6. ~. 6* . *6* * 6 * 6 66Markoglou6 66 6 . * 6.* 6 6 * 6Sen6or6 Advisor:* 6 * * 6 * Sara6h Mura Trnsarn*gvennc i as fndmntl6o FACTS & FIGURES 82% A 36%INCREASE RISK RADAR FOR MINING AND METALS of primary energy in energy demand is TOP 10 BUSINESS RISKS supply came from oil, expected by 2035. 2 gas, and coal in 2012. 1 A FURTHER Africa's $382 in oil, gas, and 54 0 An average GDP mineral exports 1 smartphone included BILLION in2011.' MILLION contains 40 PEOPLE different of investment in natural could be lifted minerals resources will be needed out of poverty by 2030 to meet demand - by the effective more than twice the rate development TRILLION of past investment.I of natural resources. OVER m ~"o'2014 -2015 ~ 50% is the estimated - weekly cost of large mining and $0 of company- metals projects report MLIN community0ATCK schedle deays ad/ MILION conflicts. 6TIN or cost overruns. 247OFSB1% 106 LESS THAN174&CRUTO A42%ODROP20 m iin C02 emissions -0 isneededby2O35 of countries relying on oil, to ensure global gas, and minerals have temperatures rise satisfactory standards less than 2'C.' of transparency and 1 accountability. 7 UNDER THE RADAR RISKS International EnergyAgency - Key Energy Werld Statistics 2014 McKinsey Global Institute repert 'Reverse the curse" Source: EYreport en "Business risks facing mining and metals 2014 -2015" 2 EY report en 'Business riiks facing mining and metals 2012-2015" 6 Franks et0a., "Canflict Translates Environment and meeSocial Risk int Business Casts" schdueaelysrndhM LLONeonias. orNatural Resaurce Gvernance Institute "Resaurce Gavernance Index 2013" 6 nIrN e ND M iNiSn Jaurnd by 2 oo r ey ni 6 SSTAN UTTNG- tG UIesur SlToal FACTS&aIGURmineralsayhave RE.... INVENTING GN NAngt.o American on how a diverse and unlikely coalition Is seeking to transform the industry INTERV.EW.W.TH Mark ..Cut..fan. Chief... Exectiv,. AgloAme.ca ..~~~~~~~© nt American....... ie ngo meia 8~~~~~~~~~~~~~~~~~~~~. SU TAN CUTNGEGEBS.ES.OLTON.USNS..UTON..SAIN.REKHRUH.TRTGIS/Fbuay.. The mining industry is at a critical point as stakeholder pressures multiply. In response, an unlikely coalition of players - from companies and academia to civil society and governments - is helping shape the "mining company of the future." Their initiative, known as the Development Partner Framework, is coLed by AngLo American and the Kellogg Innovation Network, and is designed to ensure benefits for communities, companies, and the environment. It has prompted the industry to do some serious soul-searching, including listening to some of its harshest critics. This interview with one of the architects of the initiative explores how this new approach could transform the industry "I come from a working class family. You recently sought the Vaticanis and drive shared economic, environmental, and social value. anddrie hard conmi, evionmntl, ndsocalvale.Living around mines,' seeing the good, advice on relations with communiie the bad, and the ugly, I knew there was affected by mining. How do such LIANEa better way. I have also worked on the unusual partnerships help you Development How di ate Woring acroonm, civil shop floor, so I have a sense of what's navigate big challenges? (DPF) get started? F es ety,and corpo s , h doiy o fair in the workplace. It doesn't stop This is a dialogue. All you can do is engage and IDPF getstated?mak shaed urpoe arealty?me from making the hard calls. In the whether that engagement helps you do things i MARK CUTIFANI: In 2009, during a presentation to As industry leaders, we must be accountable and end, that works best for everyone." different way, then decide whether to continu Kellogg on safety for AngloGold Ashanti, I heard Nike, facilitate conversations with key stakeholders. So we dialogue. And if community leaders feel they GE, and others talking about their sustainability are providing a framework that companies can use to Mark Cutifani influence industry behavior, they will engage. hti experiences. That was really useful. Too often, in the develop business models that engage employees, com- the success they are looking for. mining industry we just talk to mining people. Then munities, local, regional, and federal governments, in 2012, at a Kellogg event in Belo Horizonte, Brazil - and NGOs - with each having a view on how we're What are your key performance covering innovation, improved productivity, and running our businesses. What are the challenges you indicators? cost cutting - we talked about innovation in sus- I would hope that 90% of the time we could agree. still face? We track the number of protests and projects tainable mining practices. That's what started this And when we cannot, at least we can have respectful because we did not secure a license or reach a conversation. discussions and get objective feedback If we want In Botswana, the president recently said publicly broad based community support, we must have that Anglo American was its preferred development mtetwhether commnty Tehse modeatsursdmn What are you trying to solve with constructive conversations. . communities and governments. Some compa the DPF? industry strike showed us we need to engage very On our side, we need access to land. Developing a How are you mobilizing fellow mining differently with employees, We have learned a lot bulalls t ee one out y w t,e healthy relationship with local communities is a more companies? pme ie n c m we he been trough front line. sensible and cost-effective way of operating than pe nCre6,Clmi,w aebe hog sehnsibeand cot-erffective a oa operatnt This industry is a quick adopter of things that work. relocations, and the vast majority of the community On a personal note, what drives,yu fighting each other. If you have a local community But it really does not have a major brand leading the has signed up. Of course, the conversation with the fighting you, you might add 20% toy t way on sustainability, like Unilever for consumer last few families is really difficult. How do you telli you could have pursued a 1% solutiongoods. So we decided to get out there and shine a someone they must move from their home? It is a When I first entered the industry, the guy wh The game has changed. Yet we are 10-20 years behind light on what we think is the right way forward for tough industry from that perspective. But as long as tored me was killed on a shift. So safety has al other industries. I see great work being done, but we the industry. This also allows us to deepen relation- we are open, honest, supportive, and constructive, been front and center for me. And I come from are missing opportunities that could make a differ- ships, increase productivity, and harness innovative most of the time we will be in the right place in that working class family. Living around mines, se ence for us, for our shareholders, and for the com- approaches. And in 5-10 years, this could position us conversation. good, the bad, and the ugly, I knew there was aiete munities where we operate. To be sustainable for the as the industry leader. way. I have also worked on the shop floor, so I long term, we have to do things differently. And we Do shareholders support the DPF? sense of what is fair in the workplace. It does n should reflect on what we did when we were growing We have good support for cleaning up bad practices me from making the hard calls - you have to m successfully and had more community support - if sucesfuly ndha mre omuntysupor -ifand capital discipline. And our ethical investors are hard calls and be transparent and honest. In thIed you go back 100-200 years, we were literally building happy to see last year's 30% reduction in safety ici- that works best for everyone. essential infrastructure across continents. c ldents and 40% reduction in environmental incidents. S u e a alBut 80% of shareholders are probablywondering fighting you, you might add 20% what to make of this approach. So it is critical to to your costs - when you could demonstrate that this is about more than ticking sus- tainability boxes. Getting this right is mission critical. Abo erican and IFC have pursued a 1 solution." And when you explain that getting it wrong means a AngLo American nd IFC have collaborated in several p five-month strike or delays in obtaininglicenses, the Latin America ad Africa. AngLo American is also a key Mark Cutifani pennydrops. Itis abit like safety- at some point, it in IFCswaterand mining roundtable in Mongolia, whicw're willjust be the waywe do business develop a shared approach for water stewardship by di how to best share water resources and secure water su local communities. 10 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / SHAPING BREAKTHROUGH STRATEGIES /erayo51 LEADERSHIP CHALLENGES IN THE EXTRACTIVE INDUSTRIES COMMODITY PRICE VOLATILITY ss SHARED GEOPOLITICAL UNCERTAINTY AND RESOURCE NATIONALISMPR0SEI HIGH COMMUNITY AND STAKEHOLDER EXPECTATIONS * *f * Three key steps leading extractive NATURAL RESOURCE SCARCITY AND COSTS companies are taking to address a complex array of sustainability challenges BY Jane Nelson aDirector, Corporate Social Responsibility Initiative, Harvard Kennedy School (DWorld Bank 12 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / SHAPING BREAKTHROUGH STRATEGIES /eray05 1 Extractive companies face a wide range of DEDICATED ENTERPRISE DEVELOPMENT leadership challenges. In a time of increased INITIATIVES OR FOUNDATIONS geopolitical uncertainty and commodity-price RIO TINTO'S 2. BUILDING PARTNERSHIPS TO volatility, these companies need to deliver FOUNDATION ADDRESS SYSTEMIC CHALLENGES stronger cost controls, greater operational No matter how rigorously a company manages its own efficiencies and productivity, and disciplined business operations, many challenges are systemic. capital allocation. They must also tackle EXXONMOBILS They can only be tackled through partnerships and by growing resource nationalism, threats to ETRRS Crwn eorentoaim het oENTERPRS strengthening the capacity of external institutions. natural ecosystems, higher community Cooperation is most crucial in improving tbe trans- expectations, more sophisticated activist parency, integrity, and quality of resource revenue campaigns, and increasingly vocal investors. management. Tbe taxes and royalties paidby oil, gas, 3. ENGAGING TRANSPAR These challenges must often be addressed ANGLO and miningprojects dwarf what they can spend on EFFECTIVELY WITH STA whileoperting n plces here overanceAMERICAN'S local content and community investment programs. Most critically, promoting shared poprt en while operating in places where governance ZML nta otx,fsa otiuin edt e frameworks are weak and the delivery of PROGRAM oil, gas, and mining companies m pulcsrie siaeut.BPBLIO' HVO' PAID AND RECEIVED TRANSPARENTLY; credibility with key stakeholders. Cetn rnpr public services is inadequate. BPILTNSCERNSflt fb tt WORLD CLASS NIGER DELTA WELL-MANAGED FROM A MACROECONOMIC ency on fscal payments is one oe motmoa To address these complex and at times SUPPLIER PARTNERSHIP PERSPECTIVE; AND, steps that a company can take. Rio conflicting pressures, leading companies are PROGRAM INITIATIVE SPENT SO AS TO ENHANCE NATIONAL DEVELOP- Oil bave been pioneers in reportin NEWMONT'S their tax payments. taking three key steps: AHAFO M ENT GOALS AN D B EN EFIT ALL CITIZENS, I NCLU D- FOUNDATION ING BUT NOT ONLY THOSE IN RESOURCE-RICH Leading companies are placing gr AREAS. on becoming more transparent andacutbei Yetths eqirs srog ovrnnc an pblc ecortheir community engagement. A fecopnsar Yect y his h r q i s stong govern ce M u tsa epu l ectr negotiating form al com m unity agr e nt,s c 1. ENSURING SUSTAINABILITY EXCELLENCE cpct,wihsofemsin.Mt-tahodras Chevron's Global Memoranda ofUdrsadn IN CORE OPERATIONS initiatives such as the Extractives Industries with communities in the Niger DElaNwmn' Transparency Initiative (EITI) can provide useful community agreements in GhanaanSuim,ad In the face of high political and market uncertainty, Delta Partnership Initiative in Nigeria, Newmont's padrm capacitThreghis g satiuared r oiity MionoaAgrowins numbe lofcoanisaeas senior executives are focused on controlling what Ahafo Foundation in Ghana, and Rio Tinto's Rossing effrt cpt . mroereion an ncpaltcua gedorjn- establihingrcommnit gubrac c haim they can control within their own business opera- Foundation in Namibia. Several companies have enotscpt to maroerenarvnelffcieyn and muiiaoensupporthing ocalit goverancistuonad tions and value chains. For the leading companies, made women's economic empowerment a key part of moelsscstCs ulcsc capacity bumngervnesefc ildingn indesupenden clteresluinc stutrs this includes an ongoing commitment to strength- their employment and enterprise development goals, program inuPer are worthpbli setrghennand ruli-g Sompeeo,gsndtnn companiesrehavetistb- ening their risk management processes and creating including Anglo American, Rio Tinto, Newmont, crotiag elsehere Anothrepflgthepnisg to realih Shme tird arty ord mnidednt madvsrgop ssharednalut e rfougr tac e ve eto.etrE x n oi,a dO rct independent oversight or advisory groups consisting to strengthen the quality of their:sa ehle sustaiabilit perfomance.Despite this progress, even leading companies find it of donors, extractive companies, other business relationships and the transparencrnuntgiyo Over the past decade, most major extractive com- hard to translate corporate-level commitments into leaders, and civic leaders who can work with govern- their reporting. Some of these are a h oprt panies have implemented comprehensive policies, operations on the ground. Challenges include lack of ments to ensure resource revenues are allocated to level' such as ExxonMobil's Externa iiesi standards, and management systems to handle safety, alignment between internal commercial incentives key development priorities. Advisory Panel, Shell's SustainabiliyEtra environmental, social, and governance risks. These and sustainability performance, inadequate focus on Cross-sector partnerships also offer great poten- Review Committee,' BHP Billiton'sFrmo company-level efforts have been complemented corporate culture and behavior change, and insuf- tial with respect to shared infrastructure, which Corporate Responsibility, and Baric'Coprt by global frameworks such as IFC's Performance ficient investment in hiring or developing the right often requires multi-billion dollar investments. Social Responsibility Advisory Boadc thr r Standards, the UN Guiding Principles on Business skills and capabilities. Opportunities exist to explore ways that project-re- at a country-level or even project-v,wihate and Human Rights, ICMM's Sustainable Development A key solution is requiring all senior executives lated infrastructure could benefit other sectors, such examples including independent mitrnmch Framework, and issue specific industry-led guidelines, and heads of projects and operating units to be as agriculture, tourism, and manufacturing, and to anisms established during the contutonomh which have created common platforms for impact accountable for their performance on safety, people, identify potential donors and co-investors needed to Baku-Tibilisi-Ceyhan pipeline andPrLNpojcs assessment, implementation, and accountability. sustainability, and external relations, in addition make this happen. Companies operating in contexts While these are often challengingtomng,he Likewise, many leading extractive companies now to their functional or operational responsibilities, as diverse as the Simandou project in Guinea and the can offer an additional level Of OVErihanisgt have local and national content strategies, focused on Corporate culture and behavior can be hard to shift, Papua New Guinea LNG project are taking a more to help improve project performaneadcdilty building skills, creating direct and indirect jobs and but cross-functional working groups, communities of proactive leadership role in developing or strength- Learning from past mistakes, imprsiepors supporting enterprise development. Some companies practice, leadership training programs, and mentor- ening shared infrastructure with their host govern- has been made in understanding thI hrd ik n have established dedicated enterprise development ing and champion roles can be valuable. Rio Tinto, for ments and other partners. benefits of large-scale oil, gas, andciigprjcs initiatives, such as Anglo American's Zimele program example, has established a Stakeholder University There are also opportunities for cross-sector part- Useful frameworks for creating shaef roprt in SouthAfrica, ExxonMobil's Enterprise Center in in partnership with Georgetown University for its nerships to preserve environmental ecosystems - in have been developed by a variety ofmlistkhle Papua New Guinea, and BHP Billiton's World Class managers, and many companies have created internal particular joint programs for watershed management, initiatives, consultants, and industyldbois e Supplier program in Chile. train-the-trainer programs and networks of safety regional biodiversity, and technology innovation. they require full commitment and(elh ciiu Others have created local or national foundations champions. Examples include the work of the 2030 Water from all sides - companies, governmnsioo gn with a primary focus on enterprise development, agri- Resources Group and Canada's Oil Sands Innovation cies, and nongovernmental organiaon-toesr culture, and vocational skills, such as Chevron's Niger Alliance. effective, sustained implementatio. 14 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS ISHAPING BREAKTHROUGH STRATEGIES /erayO51 4- ~~Cutting-edge businesssouin Working together on Investing in a wide rang biodiversity at the partnerships to continu Oyu Totgoi mine in operational performanc g Mongotia. Local benefits. Partnerships are especially valual times. A good example is Rio Tint rwhere we are working with IFC, C Government of Guinea to advancn $ 1nore project. We recently signed a I sagreement that will pave the way ever infrastructure project: a min INVESTED BY RIO TINTO IN INFRASTRUCTURE can create an unprecedented develpetopru PROJECTS IN 2014, PROVIDING LONG-TERM nity for Guinea and the broader rego.( diin DEVELOPMENT OPPORTUNITIES AND BENEFITS despite the rapidly spreading Eboairsthog P artour partnerships we have been ab a feasibility study and initiate a gl We have also strengthened our business through process for Simando. g e lA A Icollaboration with local suppliers and contractors. At Best practices our Pilbara iron ore operations in Western Australia we began an eight-week skills training program for Our broad experience points to a feI hrdbs indigenous peoples in partnership with one of our practices that keep partnerships helty scaffolding suppliers. Trainees become full-time d CLARITY employees of the supplier, where they can utilize their Alprisms etasaeta Aleapaties Ist bs ranspaent abuttthereomoeteves BY ~~~~~~~~~new skills and develop careers. This program ensuresBuiesprnsmstbclaa How Rio Tinto relies on that our suppliers mirror Rio Tinto's values by facili-ecnmcostat. Sam WaLsh AO tating local employment and that our operations have partnerships to m anage ChiefExecutive, broadly shared economic benefit. 1 CERTAINTY Rio Tinto Rio Tinto is one of the largest employers of Aboriginal Partners must assure outcomes ba rs ,s a e b n ft ,people. We purchased $1.2 billion in goods and ser- mance. Accountability for each parnrsrl nue vices last year from companies owned and operated ther e is a r egular means, of measurnshiebnet and create successful ~byAboriginal institutions and we have numerous IVSNGFRTEL G- mutual benefit agreements in place with Aboriginal Muua INETndesadn FOR t TElong-tER business outcom es community groups. investing in partnerships through lleooicces As the global economy struggles to reach full recovery, Technical partnerships All parties need to avoid being pei we continue to focus on cultivating innovative part- the goal posts on their partner or Partnerships are among the most nerships between industry, government, suppliers, Partners can bring new expertise to the table. Take when times are good. In periods o communities, individuals, multilateral organizations, our Oyu Tolgoi copper mine in Mongolia, which is turn, tough choices must be made valuable tools for global businesses, and civil society. In our 141 years of experience, we consistently recognized as a leading biodiversity provide an opportunity to strengt have seen that such partnerships help us to maximize conservation project in the mining sector. Rio Tinto rather than turn inward or do it a shared benefits. is workingwith the Global Biodiversity Conservation are exactlywhen businesses, gove CEO of a company many perceive as to develop a long-term management plan, along with munities, and civil society should rdul fht inepnen,bu RoTit'sS m alh Co m niy atnrhisa monitoring system and an offset program, which are to pursue shared growth and prosprt.Son indeendnt,but io int's Sm W Lsh Community partnerships At Rio Tinto's Weipa bauxite operations in Australia, expected to have a particularly positive biodiversity partnerships, based on shared bet argues that dynamic partnerships we have strengthened partnerships with local impact. Alone, neither Rio Tinto nor the Government and trust are the foundation of su inignos rop b ivetig nedcaio adof Mongolia had the expertise to bring these required through good times and bad. undepinbusiesssuccss.indigenous groups by investing in education and employment programs in collaboration with local components to the project - it was through our part- Partnerships, he says, are especially communities. While some may view this as simply nership with the Global Biodiversity Conservation standard practice in Corporate Social Responsibility that we were able to meet our common biodiversity (CSR), investing in people and relationships has goals. About Rio Tinto and IFC such as downturns in the economy real business benefits. In fact, in 2002, we signed Rio Tinto is a long-standing IFC partner i or commodities cycles - when the an agreement with 11 local tribal groups to support including the Escondida copper mine in C aboriginal employment, training, and business When it comes to commercial partnerships, strength- iron ore project in Guinea. IFC is also wo tendency is to become sef-focused and enterprise development. This partnership has led ening relations with suppliers and customers benefits financing the Oyu Totgoi project in Mongo f earf uL. It is exactly at these moments to local economic development and underpinned all parties. For example, in 2013, Rio Tinto and Mitsui on advisory programs including LocaL our operational performance - a mutually beneficial signed a 20-year shipping deal that insulates both stewardship, revenue management, and when partnerships prove their worth. sustainable outcome. companies from market volatility. of sustinability. 16 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS /SHAPING BREAKTHROUGH STRATEGIES FACE-TO-FACE W ITH CIVIL SOCIETY "Successful engag depndsonrespec(n authentic communt WWF, Natural. Resources Governance representation co with a focus on eviec Institute, and Fund for Peace offer and not rumors." reflections on how to succeed in sharing the Heydi Isates Proteccin A bientalRogen gains of oil, gas, and mining investments Guateonala INTERVIEWS CONVENED BY Veronica Nyhan Jones DANIEL KAUFMANN STUART ORR JJ. MESSNER Advisory ServiceswHead, Infrastructure & Natural Resources, IFC ~ IP President, Natural Resources Head of Water Stewardship, ExecutiveaDirect,n Governance Institute (NRGI) WWF Fundfor Peace It is not in a company's longer-term interest to see A lot of the benefit sharing discussion has focused on In order to be truly successful ove Amid serious concerns over the citizens denied benefits from oil, gas, or mining how a company protects its social license to operate, companies implementing large-s extraction, Enlightened companies know it does not without considering the company's long-run business and infrastructure programs need distribution of economic benefits pay off to secure a lopsided deal from a government. strategy. It is easy to digwells for communities. But if responsible citizens. Recognizing and the environmental and Companies may derive short-term rents pleasing we are to look at long-term risks in terms of scarcity affects operating costs, there is a some shareholders, but the likelihood of the deal of resources - especiallywater - then we need to for approaching human and ecom social impacts associated with unraveling over time is high, eventually harming the reframe this into a broader debate about what is good challenges holistically, going beyonchektebx oil, gas, and mining operations, company's bottom line, There are multiple instances for everybody community engagement efforts. of deal renegotiation or cancellation. Companies are getting better at identifying environ- The extractive industries must oitrdoeswnot Transparency at the contracting stage promotes mental risks. More are disclosing such risks through minerals are located, which prese how extract ive companies can deals that are more balanced. Contract transparency CDP (formerly named the Carbon Disclosure Project) the company (both operational ar helps manage local expectations regarding the flow and the Global Reporting Initiative. This kind of well as to the host communities af shr h eeisgene rated by of benefits. Without transparency, expectations can reporting increasingly affects how investors are view- activities. In conflict-affected areas eei-hrn their activities and how to best become inflated, undermining commitments made by ing assets, enabling responsible, forward-thinking approach is all the more critical. S government officials and companies. Being proactive companies to reap some competitive advantage, investing in multi-stakeholder co engage with key stake holders. in communicating benefits, especially with today's But within many companies, risk discussions are Partnership Initiative in the NigerDlaanidp- lower commodity prices, is in a company's interest, still limited, They realize that resource risk is one dent foundation funded by Chevr But transparency alone will not suffice; we risk having of their biggest problems but are focusing on driving has been instrumental in facilitat "zombie" transparency - transparency that exists only efficiency only. The shift in mind-set needed to view organizations like the Fund for PE on paper. Translating disclosure into accountability risk reduction and benefit sharing in more strategic creation of locally-owned peacebi requires an enabling environment in which civil terms is still lacking. that bring together traditional rul society can operate, including freedom of expression. government, youth leaders, wome Manyrnentsinessaes,ndandpancivilengocractiv An autocratic regime releasing information on oil alland hae eitth taoda c oneryn 'th sacces revenues while censoring the media and civic leaders niand owe lgtmt compesw eld. M aw he ove- All stakeholders must have ownershp rmscrt cannot be made accountable. When there is no rule of snt hae. smp.not kept pawi e de n services contributing to the desig law, there are no sanctions for mismanagement and busesgi, ote a e the ob t o human rights training to women e "zombupi"tanrn cy -uins traspaenc thatn existse only o no oiiaenpaeadeoclai onrptr. to engage companies. Some of the most exciting new tlatning ead se a eon at opportunities involve aligning these agendas and caivri cdaersoe mmte t u o w seeking more pragmatic approaches to environmen- apoprhensall ruli mus ofncdto tal management. company'sylong-runrbusiness 18 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS/ SHAPING BREAKTHROUGH STRATEGIES /erayo51 SMALL COMPANY nvstment inLbei Aurus'minng it in.... L e , n s a sae ofdeelp ment inmd.214.©. 20 SSTAI CUTING-DGE USINSS SLUT NS BSINES SOUTIOS / NGAGNG FR.SO.AL.MPAC.F..ry20..2 Cutting-edge businesssouin SInvolving the community is village relocation, creating agrtda co- operatives and deve aking carpntry build trust and estabLish a ourtaicl- mining enterprise. und what they u i compan earnai ia Lioberiat,ive an en thre T hatniy preesintinge ity Devlpnt me a norarcef andall emen -tfromcskial shortnae through w hes cotosaltdrahose affeced byBrka i endt whichn mens "ttoO,n i thethesettlement We did th the codeasato wroughtnstruction byd the Ebf warrsine phase before the mine was active. This is important themselves. because once you are operational, it is too late to build Ipoigorbsns thethe right relationships and consensus. rd r u i At the same time, the company wiunderstands thtlovdiwatchingptaco-operatives will produce suppli clothing for mining workers, whiletusingcscalnlavon place. This village once had no and materials lowers constructioniot.Bidn source of income and relied on illegal skills allows us to identify potentialepoes hc gold mining and logging activities, means we do not have to keep im Today, hundreds of people have been we are going to use high-tech siam How do wc tranlawomen to operate heavy mining e i maing e t trucks, dozers and excavators (it t and construction and are working in women drivers is safer, more cost our agricultural cooperative." empowers the women themselves One thing to remember, however, i hti sciia t oei g etalonot to bite off more than you can c e nyou say you will do goes a long wa One unusual feature of our plan is that we have trust and that means breaking purchased land for the relocation and created deeds small, concrete stages you can act so everyone eligible for relocation gets a new prop- True, this approach is not always eayadcntk erty along with land rights. And rather than bring in longer than conventional mine de outside contractors, we involved the community in village relocation. But we know w all aspects of the design and construction of the new costs less than bringing in extern As a junior company operating in Liberia, Aureus village. undertake construction and reloca faces many pressing challenges - from skill We knowwe cannot provide jobs for everyone. So Most importantly, when you estat shortages to a fragile investment environment to we have also developed small enterprises to help community a stake in the project,anhepeol people create sustainable sources of income. There develop new sources of income, t the devastation wrought by the EboLa outbreak. Yet is a woodworking co-operative (run by a local youth responsibility and ownership. Theieeisaecer the company has remained resolute in emphasizing leader), as well as sewing and agricultural co-oper- we minimize our risks and, ultimat atives. We have also set up a marketplace for local business that is much more sustai sustainabiLity in its work. Aureus understands products and produce. that building public support is just as important as obtaining a mining License or a mineral development agreement. Without the support of the community, argues CEO David Reading, the chances of About Aureus and IFC Aureus is a re[tive[y new investment aniewoprop- establishing a thriving business are Low to zero. IFCs investment of $11 miLLion in equity in pLans to support some of the company's on entrepreneurship training. 22 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / ENGAGING FOR SOCIAL IMPACT,/erayo52 THE GENDER CONTRACT How ExxonMobil is promoting economic opportunities for women in Papua New Guinea BY Peter M. Graham, CBE Managing Director, ExxonMobilPNG Gender violence and inequality are among Sustaining agriculture Supporting leaders, entrepreneurs Underpinning our corporate citizenship and the most pressing of the many development We recognize that even seemingly small interven and employees investment are the manytalented and dedica women working for EMPNG across the entire challenges that confront Pa pua New tions to support women can have significant impact. Over the past eight years EMPNG has also supported This includes Papa New Guinean women workigi Guinea. When Exxon Mobil began to assess The agriculture sector is the largest employer of 49 Papua New Guinean women in the Global Women our Land and Community Affairs team, fema the resource potential that led to the Papua New Guineans and is the lifeblood of many in Management (GWIM) program, which helps tions and maintenance trainees along with eners construction of the multi-billion dollar Papua communities. EMPNG's food and agriculture pro- them manage and expand their organizations. The planning and safety staff. gram provides women with the opportunity to learn skills and networking opportunities offered through New Guinea Liquefied Natural Gas (PNG LNG) how to produce and market different products that GWIM provides participants with the capacity to Development challenges require ongoing coll Project, it quickly recognized that supporting generate income for these women and their families. expand their impact in their communities. ration hetween the public sector, industry ani women's economic empowerment would be Since 2010, the project has provided training courses society. Together we can, and are, creating po criicl t te rojcts uccssan todrveacross 26 locations serving 113 active women's groups. Omhen'tes ecomopponites ikncludroe ning critical to the project's success and to driveskills, nutrition broad-based economic growth. and household health, and hygiene. the Board of the PNG Business Coalition for Women (BCFW) - an organization supported by IFC and the So far, more than 650 women - and a handful of men Australian Department of Foreign Affairs and Trade - The participation of women in a nation's economy is vital. working to change traditional stereotypes - have and partnering with the World Bank and the PNG Papua New Guinea's future will be - in no small part - depen- graduated from this program. EMPNG has extended Chamber of Mines and Petroleum to deliver entrepre- dent upon the increasing role that women play in the country's this program with a "train-the-trainer" course, so neurial training to 160 women in rural areas. workforce and economic leadership. Papua New Guinean that women from other areas can be taught vital women can, and must, be part of the development solution. As skills in food security, food hygiene and income highlighted in the UNDP's recently released Papua New Guinea generation, and to promote long-term program About ExxonMobit in Papua New Human Development Report (2014), as well as in a Harvard sustainability. ExxonMobil has been in Papua New Guin case study published in 2014, ExxonMobil PNG (EMPNG) has currently his interests in fuels marketin implemented a number of successful programs to empower is responsibte for constructing the $19 t women and built community resiliency. The PNG LNG Project is in integreted dev ge production end processing fecilities,ionsuoreee pipeines, end liqueffction fcilities. 24 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS!/ ENGAGING FOR SOCIAL IMPACTFburyos2 A decade on from a protracted civil war, t s Sierra Leone's economy had been growing c impressivey, recording doubLe digit GDP growth in 2012 and 2013. But the rapid spread of Ebota in West Africa since earLy 2014 has added a compLeteLy new and dynamic business risk - and it couLd cost the region more than $30 biLLion by 2015. As one of Sierra Leone's largest employers, responsi- Perhaps the most visihle sign of ourrsoseiih hle for the direct and indirect employment of nearly newly constructed quarantine andioaonut 2,000 people, Sierra Rutile (a leading producer of in the grounds of our health clinic. hl' ipo mineral sands) quickly recognized Ehola's potential portionate impact on health worker a enwl for husiness disruption, documented and dedicated traini on: What was immediately apparent was the need to as protective equipment and cloti st e keep our workforce safe. Our initial strategy was very crucially important investment. simple and had three main elements: A successful response to Ehola is s economic growth. The GDP of Sie Awareness building had heen projected to growhby over1%i204ha Regularly providing staff with information about sichenrvedowto4.Wleheftsont support the fear, the stigmatizationo( hlaafce Ebola so they can recognize the disease and pro- countries has manifested itself in tect themselves; visa hans, an "Ehola tax" (freight a e to transportation costs, an A.* Screening making travel in and out of the counr ifcl.Ti Checking the temperature of all employees has hurt the Ehola response, as welisteSer Aand visitors to the mine site to keep potentially Leonean husiness community, and a eeae infectd peole ou; andanxiety among international inveso. inece Sierra Leonean Notwithstanding these challengeswehvmagd Improved hygiene to keep our operations going with Providing increased facilities for hand washing. Nearly one year on, our workforcecean hl free. Sierra Rutile's Ehola responseo'ssrstmpyesvepni We also had to think heyond the mine, Mining opera- in maintaining a roust operatior tions of companies such as Sierra Rutile are hased in We have sustained improvements How Sierra Rutite remote rural areas and are closely linked with local and completed on hudget the upgrade forraio busines disruption.co communities. Around 60% of our workforce is from aiml and hadnio threect main elements: m i -ca m i in and/or lives in surrounding villages and we use many expancshpets n aemitandasrn Aware slocal suppliers and contractors. This tight interde- ne she com pany is copiRg u r pendence hetween the company and the community meant our approach to managing Ehola had to extend Leone, our participation in the EL a national hea lth crisis heyond the mine itself and into the communities. Mohilization Group, an 80-strongh Working with traditional local rulers and community set up hy ArcelorMittal to facilitateacoriae i Si a Leone representatives such as Paramount Chiefs, women's response to Ehola in West Africa, hshe rtcl groups, youth groups, district councils, and local par- This group lohies governments, liamentarians, we initiated a daily house-to-house humanitarian response, and liaisi P i temperature-screening program targeting an esti- on issues such as insurance, flight mated 11,000 people. We also collahorated with the restrictions. John Bonoh isaytocal security orces to set up screening chec poits, Eholawill inevitahly test our reso CEO, Sierra Rutie Limitd suppling them with t ermometers and chorine and also that of the country. What Equally important has heen to circulate accurate and clearly shows us, though, is that tc accessihe inormation from ierra one 's ministry the other side o t, o Heat h, te Wor Hea t Organization, and the US including engaging widely with th @Sierra Rutile Centers or Disesee Control, and the rest of the private sector. gBUSINESS SOLUTIONS/ ENGAGING FOR SOCIAL IMPACTandecommunity A SPIRITUAL PERSPECTIVE The International Interfaith Investment - Group (3iG) on how the Church is engaging (and actually investing) in extractives INTERVIEW WITH Why should the church care about What is your view on the Development Is there a way to secure societal Revered Seamus P. Finn extractives? And why your group in Partner Framework (DPF), initiated by fairness? Is it always a dynamic Executive Committee, 3iG, the Kelg I Network and is there a sweet Director ofFaith-BasedInvesting, Oblate International Pastoral (OIP) Extraction of natural resources has been part of AngLo American? Is it different? Every sovereign territory in which a mining copn Investment Trust human development for thousands of years. People Will it have traction? operates is different, so it is a dynamic. Comp have always looked to the faith traditions for some We have always argued fo a mlt-tkhlde have had mixed success with local developmenpr- kind of guiding principles. And the church is keenly engagement process. What I like about the DPF is that ects. Some companies are seriously looking at W e bohteVtcnadteinterested in the impact of extractive sectors, notably it is inclusive. The industry is willing to come to the stakes for local communities, which can be chlleg fhow people's lives are affected. table, then invite in academics (Kellogg) and NGOm i ing for federal governments that hold the la Church of England hold "days There is also a fairly large coterie of faith-based and create a safe space where we could discuss some sign the exploration contract. In this way, the of rfletio" onminng,theinvestors who own and manage funds and endow- of the prickly issues challenging the industry. The give communities vehicles through which to exrcs orelcin onmnn,tements. They want to manage the money in a way that DPF offers a practical and objective sustainability responsibility and push them to determine whar equivalent of a tectonic shift has isconsistent with their beliefs and teachings. For framework that companies can pursue. their best leaders and who will manage the invet WhiLe this marriageexample: Are they transparent? Are they honest? Do ment for shared community benefit. This is a occurred. W ietimar gethey pay their workers fairly? Are they concerned The industry seems to be at an forward from giving money to central governmet of religion and industry may be abouthuman rights andtheenvironment? inflection point, how can it come and hoping for fair disbursement. surprising, it is not new. Indeed Why social justice through through it and be successfuL? What one piece of advice would faith-based groups have been investment? The industry does not have an unlimited horizon give to extractive companies tha Customers will start looking for alternatives. If trying to stay a head and thrive? not only engaging but actually The sociajustice and investmentworlds often do companies cannot guarantee a conflict-and child investing in the extra ctive not interact, There is typically not much nuance in labor-free supply chain, then customers will vote Miy adver oul bton enagecomte proac- a socialsjustice campaign, where clear slogans such with their feet. With the right leadership though, the tiei nhe ry exltint tehopocs hen sectors. One of those groups as "no mining!" are needed. This maybe right for industry can change. descibestheratinaLeanda certain community. But it does not work in every of land, prior to bidding, that is when some engae describescircumstance. How can extractive companies have ment with the local communities needs to sta what impact it is hoping to a "moral compass" to drive this new includes close oversight over subcontractorsw aheeb drvn enae etWhy is it worth investing in aedfowr?might do the initial drilling - and who leave thfis achieveextractives, when some have chosen impression on a community. through investment, to opt out? There are parallels with our conversations with pharmaceutical companies about reaching the It is a balancing act. If you take fossil fuels off the underserved. And about ethical conduct of banks in table, it significantly narrows down the investment the financial crisis. The extractive sectors are a little universe. For example, this smartphone I am holding different, in that they involve common resources. But has over 60 minerals in it, and mining contributes in we can offer moral guidance, for example encouraging some way to over 40% of economic activity. Nobody is companies to consider indigenous traditions looking perfect, and we believe through engagement, you can seven generations ahead - at least 100 years - about About the OIP Trust and IFC change some minds. the choices they make today. This goes beyond a The P Trust is co-investor with IFC waa life or mine and mine closure policy and includes Fund, a pn-African private equity fund f restoring the land. and focused excusivey on investing in A 28 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / ENGAGING FOR SOCIAL IMPACT,/erayo52 a poerfummariag H ow. P e ru........ L N G i s..... . a. II H biodver i 'hll ng sGraMng,Ht .L.NG.Operatin g.Company ....h r u g m o n it r i n g B Y.......P er.......L NG..... ..........r e t o a t o n a nd............... in n o a t iv R ay m iC raig B e ltran..................... ............... ..............~~~~~~~~~~~~~~~~~~en o E nvironmenta............................................. ........art.ne.r.s.hi.ps.Specia.ist,.O..,.Gas,.and .... .................................... .............................::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ....M in ing....G r o u p,....I FC. 3::: SUSTAIN.......................... ....UTT.........NG-EDGE............... BUSINES SOLUTIONS.............. BUSINES S.UI N..PO E T N .T EE V R NM N F b ua y 5 3 Ask any climate scientist and they wilL tell you: biodiversity matters! Ecosystem protection has also become a core concern for extractive companies - and not just because of concerns over globaL warming. Local communities quickly pass judgment on whether they believe a company is doing enough, a judgment that can make or break a company's N reputation. As this interview highlights, it is critical project, we are systematic monitoring indicator specieso for oil, gas, and mining companies to develop ftora and fauna to ensure t proactive strategies for ecosystem preservation environmnta reservation and resources en biodiversity and restoration. a e a conservation.n RAYMI CRAIG BELTRAN: Many companies What kind of results has that How important are partnerships What advice would you give to ot r think of biodiversity as an expense. delivered? like your collaboration with the extractives companies addressin Why is it a good investment? One specific example is the Pati tree (Eriotheca sp.), Smithsonian Conservation Biology similar environmental/biodiversit SCOTT RO LSETH: We have spent a significant amount an endangered species we encountered during pipe- Institute? challenges? of time and money to avoid sensitive environmental, line construction. We brought in specialists to learn A broad base of experts participates in this program, Tbe earlier, the better. This gives you a busines social, and arcbeological issues - roughly a quarter what we can do to help this endemic species prolifer- giving us real-time feedback. Our partnership advantage when operating in complex environm of our environmental budget goes toward protecting ate. This is outside our core expertise, but we can tap approacb - working with third party institutions like ours (our projects span four macro regions and monitoring biodiversity. But, that way, we have into our knowledge and resources for conservation like tbe Smitbsonian - provides transparency and ecological landscape units, 13 rivers and a wide directly benefited by avoiding impacts and potential projects - wbtch is excittng. gives us the confidence that we're getting objective of areas from 0 to over 4,700 meters above sea;ee) conflicts with communities that would cost us more feedback. Biodiversity monitoring from the outset is ket money or even block the project. In addition, biodi- How do you ensure your biodiversity obtaining data in a timely manner to feed dec versity also means opportunity: to do things well, to program is implemented fully? What makes your efforts unique and making. create net positive value, and to demonstrate that We have an Integrated Management System (IMS) innovative? Having support from senior leadership withi conservation and development are ntercbangeable. which includes our Sustainability Policy, the We created a model throgb which environmental company also promotes a proactive approach Have you received any pressure from Environmental Impact assessment process, and a and social specialists work hand in hand with project sounds easy, but when you are talking about r series of business and management practices. But we engineers and construction staff to make sure all projects like this one, tbere are many stops antars civi oityn dres biodvriy odt thtiayve sthokitahuadsovetacosadsucnrc diectlyenvironmental standards are met and that a miti- so it is easy to drop biodiversity off the priorit issues?t torsh scitmisnriticalthattouoplanscrescommnicate esgation ierarchy is adopted. This model comes with be successful, you must maintain awareness Our project is in tbe Andes rather than the rainforest, tn a way everybody understands, We create a recipe tough challenges: the different ranks of the company and make sr so it did not attract mucb attention from government, that is very specific when it comes to digging a trench btodiverstty constderations are embedded in,eer NGOs and other stakebolders. However, tbe Andes or wbat to do if you come into contact witb a tree. TRANSLATION aspect of the b represent a diverse, rich, and fragile environment Then we incorporate that into the contract so the con- Making sure engineers and biologists speak the same that needs protection. It is a remote location where tractor has to notjust build the project on time and to language; people rely on the land to survive, so any impact on budget - but also meet biodiversity requirements. biodiversity can have a major effect on their lives. Are international standards on Matching timeframes, deadlines, and deliverables (i.e. What kind of mitigation efforts have biodiversity helpful to you and if yes, monitoring reports with business timeframes); and Noprsua d ? other ste SPREADING THE WORD We began by selecting routes for tbe pipeline that Our approach followed the guidelines of the global oil Adequately co)mmunicating the findings of the About Peru LNG and IFC mintmtze envronmental disruption. Tben we sougbt and gas industry association for environmental and monitoring to locals. IFC provided a $300 miLtion loan to PLNi to mitigate our impact during the construction pbase, social issues (IPIECA) on how to set a Biodiversity PLNG and IFC have jointty imptemented seea avsr before moving on to restoration. Where we are not Action Plan (BAP). This involved utilizing a phased Tens of thousands of people come together to con- programs: (a) to strengthen SMEs that pridgosad able to establish 100% native conditions, we offset approach beginning during project planning, con- struct tis megaproject and our ability to make biodi- services to PLNG through fraings, [ to our impacts with improvements in oter areas. And tinuing through assessment, construction, and now versity a priority for them is key to our success. How of municipalities to better manage reven we use "adaptive management feedback" (including operations. The BAP evolved through an adaptive you define and reward success in a contract is key. PLNG's project and benefit tocatl communte,adc)oprve walking every foot of the pipeline to give us the infor- management approach and is aligned with IFC's tocat stakehotders with an opportunity t mation we need) to modify our plans in real time, Performance Standards and industry Best Practices, environmental and sociat performance. 32 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / PROTECTING THE ENVIRONMENT,/erayo53 Ho otl a edigoi*n gscnumto.Th olconmspaknnym, NI GGou,ad ioe t hr idsr w o makengicp smatezsingutln actinorecbusnn de e o m n pa tn r to.. stopio in wasin th soli atpcan e gas and putug itiovpodutivfus.aTtalha INTERVIEW WITHsound coteisit Jerome Schmitt tevr tr. oL abntxb odfryu business ips Senior Vice President, AiaGog Sustainable Development&Environment, Total Seor Di re e ery erveGoa te , aual g ourdstratey o Some argu extrctiv compan nt Conoatr taaioy wiine swh becomeaexinct bciasetce dchane wo ore hemeout ofave lon btprctrcrbo, aslnge ahte verintruenoi businesssed Thisethe ri clea tradin gome ampoxan isanlo.al gas,RVIEWWIT an cot ar l to remain andl noerg sourcs f Wer believetoatef Some. argus,agoigebro extractive companies are dioarstaaidicnthanusrlobealyeciecotiuort h fom eint theca busime so that tthee em ion o sa cavon, bal si thrvern6te cmig decdes Total isat. onesuchcomany generate outsid yourdnt opeatins reggeAcualoy, cgavetyisrssaegnti b sn Sstisal DvewocearL mEn i sssmenim oran nuances SeiiLiecor Absluelgy. ToEptraie intoba Perctie, whil wet emiticoy Sne208 Candan anou oi companyr haveo arc credible voiceten iniios cliat chang debtes gSm sanl copan are eLy ob remor al ot wte tokthenuseowourprodu fro amourt experie sthatde as part~~rorssv ofd thesoutonisadturrxeutveeea.i come. ues a grotie cnomaerts oexaive cmais le d no e an buete n trneeddforevelo slthirons nse s ha hytahntoLysrvvtutlghnrdutoscts urcatoadfellhayr hstocnriuetoteiihtaansaliaechne more eff n tnclimate the bmuttaeg. thatsaile meeiingc senei.s gya nd T tHoivein th cing deades.miotaLs important arenTotaans ineted ose duo crticlso IernatonalcEry Aenc tf ue investments in li iaet efficientc igns i re i t 75 of this and i2e f sionsn, co n oe enery tcor ition learn how drivsng pc e in it 50 scenrio oil c m in 2 will be cce. rso moe wf are asficc closh t gas companyion arosnd 20% C o p v eWe are also making major solarainvestments, inspc a ch high e whilee an gas p voie in te ching debates T countries from South Africa to Chile. In 2011, wesar inerae. We are wil hae dropped aou50 d became the majority shareholder of SunPower, a as irta & Iedstdecline w en e i leading solar company based in the USA whichin to con i a s as c t M ts derand i s develop technlogy buildser faclites and operatesie i ts2Cscnri,olosu pi txhigh-tech solar projects. Beyond this significant solar biof commttedto his.Bein a ajormean wehavethe positioning, a quarter of our $1 billion plus annual A noLadgscmay hti gloal understding and thae technologicaleexpertiseR&D budget is earmarked for clean tech, including se pa noaborat wih uique about oad ap t needd todevlop olutonsthatnot nlymitiate carbon capture and storage. ohr nciaeiiitvs Lmt hne vcliae ic iang e u ha g lso?cunresfomSut frmakehie I 01,weseconomicrad lBlCr nFrne.W aesense.drpedb aot 0 What is Total doing to reduce its Recognizin the cove imatang firsly, S aneenil Howe saoicompane are ta s problemcarbon footprint? alone, Total's mbiini to p rt chage fl itegreto ursne tr g W investrm ouexpents in et hat wecbeefficentra I 2008,hwe etheonusry a ul objectie s d red erten- ate erg of t e m o we dev e rustse sorc o f e to ny Inr 2008,iv wemihg -e setla publictobjective toi redcgricn- glarbobaelsiitvs.espotteUitdNtosti ieso,lokn o hrdvle ehv house gas emissions by l5% by 2015. We are ahead of Gb Cmat cal for c to ft an d l n o f the w s la Sloalupo r stn the directionofthnr g cal tra tischedule, achieving a 20% reduction last year. Inte c an clint ov t n d ios weiprog a, d g t lie afr acler foc Natralop galus twhic emts alf miga e mBetween 2005 and 2013, we cut routine gas flaring - a casignificant source of greenhouse gas emissions - by 40%, with a goal of eliminating it by 2030. At the we are joiin tlimate coan, isttuioS and asscition toii ao dead paorSonw are suchalgs compnyoa antrit which, workls atio se tpmana e antgae fur proegrams. is oertins ncsay h same time, we are increasing energy efficiency in our oil company. facilities, methane e so w orld ng an e re cagi 34Supportin CUTTINGhEDGE diUSINESS SOLUTIONS BUSINESS SeLUTIrNSy PROTEins cCutTINGe usineb oution: 3 carbo as oal hen sed or p wer enertion- no sig ific nt so rce f grenho se g s emssio s - y pl nnedZeroRoutne Flthrough230 diversificationad . Weintoworgasreand accounts for half our~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~Th gasutin flprdt hr 0,wt olofeiiaigi y23.A h eared everyn yhea equmates to la iolto, isittosadascainoo a decade ago. So we ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~mr tr smc a opn sa aetm,w aeicesn nryefcec norih Afras toanur aal e electricityupogam.Thsopeato oil company. faciliticonsumton Temisos WorldBn is workingn w aeha 34 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ wt goverments oIG-DG companies aOUINSBNd S OUIN RTCIGTEEVRNET Cutting-edge businesssouin FULL Thedimt the sexrnoi i r Forummy onin why miin and~an metasco paie materia[s and more c[ose[y a[ign supp[y with demand; improve efficiency of reso exp[oitation [the yie[d rate) by mechanizain automation and optimization; enhance t C ~~IRCtor Header ofMnin &f Metals,ocssngan W osme[ting; [imit po[utant emissions such taiPings, gangue, and mine wastewater; ad deve[op app[ications for [ower grade ore; REUSE Extend the longe cir ur The W orLd Econom ic materia, product, orservice atp t and p[anning for future app[i Forum on w hy m ining cyc[ic wastewater, waste, anizaiong systems in mining operations,an d he minera[ processing techno[ogycessingize smetin;memitpolutatceissonssucea tailings,the use of waste and byprodu downstream to design adapte ne d o re u e,re s ,meaeril product;us o seribyatipin need to reduce, reuse,a[[oys to aid identification at Enof[ead and recycle accelerate subsequent resource insat and thRCY L e u e wasten by prodcts otbrt aresources and meta[ products so that they BY_ _ _ RECYCLEReduce waste byprocessing become newly available resources; treat M awaste water before discharge; develop Director, Head ofMining& Metals, processing capabilities to accommodate rc Forum higher rates of scrap. DWEF As we push our planetary boundaries Against this backdrop, the World Economic Forum To make this happen, mining and metals companies Opportunities exist across the valuecanfo to the limit, and resources become launched Mining and Metals in a Sustainable World will need to address three key areas: develop a work- waste and tailings restatement ar scarce, it is essential for businesses 2050, a multi-year initiative to explore how the force with the right set of skills and capabilities (par- to recycling, redesign, and devel a sector can be a leader on sustainability. What is clear ticularly for lifecycle assessments); be more actively ownership models such as leasing.Dvlpna to shift to more self-sustaining means already from this work is that mining and metals involved in scrap markets; and focus on customer and clearer understanding of the oppo of production. companies can take a number of important steps to consumer relationships. key disruptors that enable them is Customers and suppliers increasin gly promote circular business models: The scale of the journey required by the industry is ticular, technology and innovation.rudtramn tm and ls c essubstantial. As such our initial attention has focused and design is critical but so is the expect mining and metals companies adteeegneo odnwb to align their strategies and on the challenge of reducing extraction of virgin ahe merls to ~~resources, while meeting the demands of a global pop- si oes operations with an emerging ulation expected to grow to 9 billion by 2030, includ- Despite the near-term challenges "circular economy" in which products ing 3 billion new middle-class consumers. Addressing metals sector, including the comm or parts are repaired, reused, this conundrum is critical for the sector. But we have now is a time to a find a voice in th returned, and recycled rather than yet to engage deeply in this conversation and to seek opportunities across t simply discarded. The global shift towards a more "closed loop" econ- close the loop. omy is one that needs to be embraced by the mining and metals sector. The industry can be shaped by this change - or it can choose to shape the change. 36 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / PROTECTING THE ENVIRONMENTFbrryO53 WE NEED GREENHOUSE GAS EMISSIONS INVESTOR PRESSURE REDUCTIONS OF AT LEAST Why the Rockefeller Brothers Fund, a 80% foundation built upon oil, is divesting from 2050 fossil fuels, and its potential impacts INTERVIEW WITH Stephen Heintz President, Rockefeller Brothers Fund Rockefeller and oil go together like Starbucks and coffee. So it took most people by surprise when the Rockefeller Brothers Fund (RBF) announced recently that it would divest from fossiL fueLs and invest in cleaner alternatives. "Like the Rockefeller Brot 1FC recognizes the urgencyo( lmt change and is a major invesori alternative energy sources uha oa Can you explain what led to your Do you think other investors will on companies is apart of a larger discussion that will and wind. At the same time decision to divest from fossiL fuels? follow your lead? increasingly influence commodity prices, the cost fuels are essential drivers of capital, and global regulatory agendas, which will atvt,w upr ut Combatting climate change with grant dollars alone Yes, we are very confident others willjoin this effort. have an impact on the operations ofthese companies. is no longer sufficient. Since 2010, the RBF has been Globally, we need greenhouse gas emissions reduc- investment in oil, gas, and working to invest a portion of our endowment (10%) tions of at least 80% by 2050. We can only get there been part of an effort that has taken the question of promoting environmenta in companies that are advancing sustainable prac- by leaving the bulk of coal, oil, and gas in the ground stranded assets from a hypothesis of activists to a maximizing societal bene tices and clean energy technologies. During Climate and by transitioning to clean energy without delay. mainstream consideration within capital markets ensuring good governance Week in September 2014, we announced that the Yet, the stock price of a fossil fuel company is linked RBF has launched a two-step process of fossil fuel to its reserves. These are stranded and unburnable Lance Crist divestment. assets whose economic value is diminished - a reality of England statement). that investors now understand and are starting to What specific changes can ext ractive IFC Can you describe how you are considerintheirinvestmentdecisions. divesting? Clear evidence of the increasing number of investors a ies reso nL ake t Our first step was to exit from investments in coal recognizing the urgency of this issue and acting on it and tar sands oil, two of the most carbon-intensive can be seen in the growing numbers of institutions fossil fuels. The second step of our process has been and individuals who have signed onto the Divest/ Concretely, companies can look at howto be good Looking into the future, how do to undertake a detailed analysis of our remaining Invest Philanthropy pledge. stewards of shareholder capital and commit to a you think your energy investmen fossil fuel exposure (oil and gas) and to develop a plan candid assessment of how to best use their resources. for further divestment. How do you think this pressure Borrowing to invest in long-term risky projects that portfoli will evolve? We are working to balance our deep concern over from investors will affect extractive require $140 per barrel ofoil to break even is difficult The window of opportunity to avoid catastrop fossil fuels with the Fund's longstanding mandate companies? to justify. Responsive companies will focus on return- climate change narrows with each day. Clean eeg that our assets be invested with the goal of achieving The pressure from this movement of investors is, we ing capital to shareholders instead and migrate from technologies and other business strategies th financial returns that will maintain the purchasing feel, adding weight to the critical conversation about a growth-at-all-costs (regardless of future profits) advance energy efficiency, decrease dependen power of our endowment, so that future generations policy - national, international, and corporate - on mindset. Extractive companies can begin to redeploy fossil fuels, and mitigate the effects of climatc will also benefit from the foundation's charitable addressing climate change with an urgency that is CAPEX from searching for more reserves to diversi- are the way forward. Our investments in thes giving. proportionate to the r fying their businesses by investing more aggressively will continue to grow as more and more econmicall Ye,w r eycfideng ters Caitllji marke aneffeealeeegyortatv.oprunte oep regulatory conditions are uniquely material to the gro viability ofnextractive businesses. Investor pressure 38 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / PROTECTING THE ENVIRONMENT,/erayo53 .eTheoInt vaLuti ona resource for mining and metals operations, which typically require a secure, good quality supply of water for several decades. Historically, the industry has thought about water In South Africa, for example, the eMalaheni use as an operational issue - largely managed from reclamation plant is a project jointly undertaknb S"inside the fence" with a focus on efficiency and Anglo American Thermal Coal, BHP Billiton control over effluent discharges to demonstrate good Coal South Africa (BECSA) and the eMalahlenLoa practice and minimize risk. But this approach to Municipality. The desalinization plant treats water management has had to shift, as the industry lion litres of water recycled from mining opeiatin has learned first-hand that inadequate consideration each day. Over half of the clean water is piped e l of other water users can result in costly delays to proj- to the eMalahleni local municipality reservoi ects, cancellation of licences, community conflicts, rest is sent to Anglo American and BHP Billit and reputational damage. operations, which are now self-sufficient in te ICMM has developed aWater Stewardship their water requirements. This broad collabo Framework designed to promote a common under- has resulted in a triple win: securing access to(ae standing of key water challenges in the industry and for mining, delivering as much as 12% of the c how they can be addressed. Central to this framework nity's potable water and strengthening the m is a "catchment-based" approach to water manage- ity's capacity to provide services. We have seenote ment - one that considers the needs, concerns and similarly successful catchment-based approa priorities of other water users including local com the Escondida mine in Chile and in Cerro Verd munities across the entire river basin. The framework To accelerate these kinds of catchment-based, promotes transparency and accountability as well as orative water management practices, ICMM hasbe inclusive engagement. working closely with its members, external expets Effective water management demands collective and even other sectors, to develop practical gu action underpinned by mutual understanding of local on water stewardship. We plan to soon publish ti water issues. That means appreciating the impact guidance, which we consider a fundamental st of water use on all the communities and interests towards mining and metals companies becom within a water catchment area so that the risks can be effective stewards of the shared and precious r that water is. mitigated. This can only be achieved through ongoing and inclusive engagement, collaboration, and by partnering with others. The concept may sound simple. The challenge is to deliver it in practice - but we already have exam- ples of successful shared-use approaches to water manage- stewardship. AotIM The International Council on Mining and MeI s[CM was founded in 2001 to improve sustainabl eeomn performance in the mining and metals indnsthyoiTo brings together 21 mining and metals colocalwcom- national and regional mining associationsccountaoba associations to address core sustainable chaLLenges. For further details, go to wweiti www.icmm/water. ml U ~~BUSINESS SOLUTIONS IPROTECTING THE ENVIRONMENT /erayo5 4 . . ... ...... . . ....... . . ............. ........... 8!:;pmee~ u=zz: EmEEN. ........................ . ........... ............ . ....... - ..... .................. .............. ... ....... ............. . ... ........ ............4H, N C M .......... .... .. ... . .... 01 l l l l l 1. . ..................... --------------------- - - 11 ........ ............. ...... ............ ........ ............ ..... ........ ...... . ............. ........ ... 211 H.ME 2~ Je MACRO LOGISTOre,', nr, "N pila, .......... l l C L E ........ .......... . .................. Tuttow Oit on t K- usmess - and development - case for transparency 6:- T: BY ieon Ttýompson Chairman, TullowOil ..... ....... . . . . . . . . . . ....... ... :ý 42 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINES P54GRESS, Tullow~~~~~~~~~Gon ison AfiacoedigideedntollopnyiGa72AnUAD Oil is not a renewable resource, but it can be diedvlpet an extraordinary source of wealth creation. Transparency is a vital first step in helping countries use the window of opportunity created by the discov- ery of oil to use the wealth it generates to drive inclu- d sive and sustainable economic growth. However, this is just the first step. The real challenge is to enable citizens to track how resource revenues are being A TrlinDollar Coalition for Oens converted into investments that make a difference. Ths ds v i o rr a decade, a global anvevnpmnts, companies, and civilntic benokng together to improveoens n beunocedthoity in the managementhofraasp parnerhip whe EITI partnership In 2hat have since evo0vetiNtotne fh ca g debate ain natural resourceboevenugettonso wetokthThe EITI crucially established a pe transparency in the governanceaofthcmutgvyesIn gas, and mining resources. Thewithnourdunder- TULLOW'S NEW OIL ASSETS IN AFRICA "Tullo has provided industry leadership issues such as contracts, licenE by walking the talk on transparency. governing the sector. It requires first w compAfrom governments on revenuesirecxac ve nan s o as La i ee oil This is critically important in frontier companies on the payments ma It ic in gloally, 2006 markets." National implementation is key.of detail. including 13 in Africa. Over the past eight years administrator - usually an acco s isoe on ns Jonas Moberg these figures under the guidanc HtheadofETI committee with representativebyfrotngohernmetst Uganda (2006 , Ghana (2007 and 2010) and, most industry, and civil society. Infor and its impact on the economy arerwadeyiptbeothetnSh recently, in Kenya (2012). eqireent of These discoveries offer significant business toco mpl ith th tr t and development opportunities, which can only Osopenness in an often opaque in be unLocked t o t n ro nom Sa, World Bank Group PracticeM is' clea thatl dislo ur build trut -witace tra an oLike many emerging countries, Ghana faces numerous Extractives. partnerships with stakeholders. challenges. However, its approach to revenue trans- The footprint of EITI is consider dene parency since Tullow produced first oil in 2010 has countries have collectively repor 2012 been Ghana to join the Extractive payments by oil, gas, and mininUSA. nis supported by 90 of the world' Industries Transparency Initiative (EITI) in 2003 mining companies and by inStitL ValuebeyonAcompliance and became fullycompliant in 2010. With the gov- more than $19 trillion of funds In 2012, in the context ofthe increasing international Whydid we take these steps? Firstly, because ofour ement's approval, Tullowpublished details ofits debate about the management ofresource revenues, core values as a responsible business, but also because Production Agreements in 2009 and an independent- we took the decision to voluntarily publish the it makes business sense. We are proud of the eco- ly-appointed Public Interest & Accountability Intern payments that we make to governments. In 2013, we nomic contribution that we make across Africa and it Committee reports twice yearlyon ho petroleum Fina expanded our disclosure to show payments on a proj- is clear that disclosure builds trust - with central and revenues are being managed. Ghana also provides WORLD.BAWORLDUB ect-by-project basis, in accordance with our under- local government and also in the communities where comprehensive reporting to the EITI. While the standing at that time of the proposed EU Accounting we work. Transparency also builds investor confi- EITI is not a panacea, it does provide a consistent Requiring Transparency and Transparency Directives, While we were not the dence, which is vital ifAfrica is to compete success- set of rules and a mechanism for checking payments Recognizing the critical importa first company in the extractive industry to disclose fully with the oil shale industry in the USA. declared against receipts, as well as being natural resource projects, as w payments, Tullow was first major private sector oil a forum where government, business and civil society influence company and governme antrict dii scourceeer equire wealthouou inveation.ti company to voluntarily disclose this level of detail. PartneringfordeeLopmcan build mutual understanding and resolve extractives. Under the IFC Sust Our corporate responsibility report, Creating Shared The development of projects in frontier regions like differences.f clients must publicly disclose thI Prosperity, also goes beyond the requirements of Africa demands the creation of a network of partner- payments to the host governmen the EU Directives by reporting other payments to ships and working relationships - with government, taxes, and profit sharing]. government, such as VAT and payroll taxes. regulators, civil society, and communities - to We also require that the principarotatwt manage the often complex social, culturali environ- About TuLLow and FC government, which sets out thek Our corporate responsibility geporci to track conditions under which a resoubeing Prosperity, also goes beyond the requirements of mental, and economic impacts of the industry. Such TuLlow has been an IF client since 2009 when FC helped anchor be made public. In lieu of cont the EU Directives by reporting other payments to partnerships will only succeed ifthey are built on the company's funding for its landmark Jubilee project in Ghana accept the publication by the cLi mutual understanding and respect. Transparency on with a $115 million investment. IFC subsequently increased key terms and conditions under goenet uha A n arl ae.the economic contribution of oil helps demystify the its financing to $165 million and is working with Tullow to is being developed (including theFeothcnrat any material payments due to g industry, build trust among stakeholders and creates support a number of its projects across Africa, including major it; other material fiscal terms a a strong foundation for shared prosperity, developments in Ugand and Kenya. summary of any significant stal 44 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS IGOVERNING FOR PROGRESS,/erayO5 4 SHARING THE. .. NFRASTRUCTURE. ...NTERV....... EW.. W...TH.. ....................... ................ S te p h......... ..n...s". S te v........- ..................Advisor........... ....o.. .....irma ...nd.. -... -.Vice.Pres.- CEO¿Auizon """ -Dev..pmen..urizo 46 SSTAI CUTINGEDGEBUSNESSSOLUION BUSNES SOLTION / OVERING OR ROGRSS.Fbrury205.4 can go nowhretwithoutghe requisit AURIZONS RAIL NETWORK IN 2014 Deiern a com"llx"w road, rail, and port infrastructure.Euly infrastructure, amiin dou no progress 2p700KM IN LENGTH OVER r o200rMILLION TONS IN CAPACITY What are your biggest innovations? How do you translate your In developing and implementing inspection, mainte- in Australia into tac nance and construction techniques which maximize shared infrastructure needs in frica i the available capacity. The increasing use of technol- partnering within other compnie thato have al ogy is an exciting opportunity for productivity and gauge technology, in complex bulk supply cha safety enhancement, for example the use of drones to inspect track infrastructure in remote locations ownership, provides an excellent template for What is Aurizon doing that others New approacbes in technology and commerci ticescanalsobe ofgreatvalueinanAfricane N.@uio are not? First, some historic context: Queensland was one of What one piece of advice would the first rail networks in the world to adopt narrow you have for developing country Oil, gas, iron ore, and other natural resources gauge technology and it remains one of the largest governments looking to develop can go nowhere without the requisite narrow gauge railway networks in tbe world. Since shared infrastructure? ynarrow gauge railways are usually built with smaller tradius curves and smaller gauge structures, they can infrastructure ambitions do not progress be a lot cheaper to build, equip, and operate than port developer/operator to invest and hold themt far, or can prove seriously unsustainable, standard or broad gauge railways, especially in more account for providing supply chain planning; without careful, strategic planning. A critical challenging terrains. They often serve industries coordination. Core priorities for government/ component of this planning is to optimize and communities where the traffic potential may not be to provide a clear policy framework to prom justify the cost of building a standard or broad gauge multi-customer infrastructure and to ensure infrastructure useage. For a mining company, line, in particular those associated with mining. tory and tax requirements promote investme partnering withnitotheneicomponiesithfatihhteof ingAs a result, Aurizon as especially valuable expertise development. shared interest in a road, rail, or port is Why is shared use infrastructure in developing and operating narrow gauge railways. What one piece of advice would often essential, not least to ensure costs do important? For instance, Aurizon bas entered into ajoint venture not spiral out of control. Itdcan allow critical rail and port infrastructure witb GVK Hancock on a proposed integrated rail and portinfrstrutuheprojctahateillnerviechsh-vo-ndveloinraountiesprokigot Here, Aurizon, which operates one of the to actuallybe built. Costs canbe spread across nnale coal mines in the Galilee Basin. This includes a benefit from shared infrastrucals world's Ia rgest coal rail networks, discusses stnakehorers, nldin diee m inin companies 300km narrow gauge rail line that would carry trains Shared infrastructure can accelerate the develp gequirealrignmt, andth peublcsetor. oist ii its experiences of owning and operating Snof up to 25,000 tons. ment timeframe and reduce the investment b e n Aroads. In developing countries where road infrastruc- We also carry freight on standard gauge railtrack, so for mining companies. It involves active engageen astute insights for those seeking to develop ture tends to be of poor quality there are genuine we have a unique combination of expertise across the to bring the needs of the various parties togethrit new shared infrastructure projects in safety and community benefits to moving freight off different technologies. Moreover, Aurizon owns and a common user solution with benefits for all. developing countries, roads and onto rail, operates integrated, bulk supply chains for multiple mining customers. The operational and commercial What are the biggest challenges in success of these multi-user supply chains can provide delivering shared infrastructure? useful insights for those seekingto sustainablyestab- About Aurizon lish relatively complex, sbared use infrastructure Aurizon operates some 2,700 kilometres Striking the balance in access and operating proto- network connecting more than 50 minesw cols that deliver optimum performance while meeting in Queensand, Australia. In 2014, this nEt individual customer and stakeholder needs. This also record 214 million tons and a significanti requires alignment witb regulatory bodies to mini- that will complete in 2015 will tift capacity mize regulatory costs and administrative burden, million tons per annum. 48 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS BUSINESS SOLUTIONS / GOVERNING FOR PROGRESS,/erayoo4 Cutting-edge businesssouin Linking rail access fees ietyt rc If you build it, they will come. maintenance and upgra At least that was the idea when in the early 1970s Omar Bongo Ondmiba, Gabon's P R president, outlined his vision of Gabon becoming an "African Rome" - driven in Reliable cost data large part by the construction Consequently, SETRAG's concession contractisthe subject of ongoing discussions with the government. . 54 of a 400-mite railway, the.. A critical aspect will be obtaining reliable data on Transgabonais, from the track maintenance costs through the establishment of relevant business units within SETRAG. This .........coastal capital Libreville. information will be then used to develop a new access through the country's jungle fee formulawhich willbe linkeddirectlyto thecost of track maintenance and upgrades, excluding what interior to FrancevilLe. will be in effect a subsidy in the form of government financing of the rehabilitation of the rail platform and bridges. It hasn't quite turned out that way. While economic This new tariff formula should ultimately be based on growth has been strong in recent years, lifting the existing user volume agreements, producing a single country above most of its African peers, Gabon's ton kilometer access fee that will be applied to any economic potential is far from realized. The economy third party user, with the caveat that it will establish remains heavily dependent on oil (which poses signif- a minimum payment for each reserved train slot icant risk given recent oil price declines), and a third (that is, the license allowing the holder to run a train of the population remain in poverty. Moreover, the on a specific section of track at a specific time). This Transgabonais railway has required subsidies from approach should incentivize smaller mining compa- both the public and private sector over the years, and nies to run joint trains in order to maximize load per is still running at less than half capacity. slot. OversuppLy Finally, the rights of any mining company that will participate in the financing of the track should be As a result, Gabon faces the opposite challenge posed recognized, not through tariff discounts, but rather by most shared use infrastructure: abundance rather through the same rights usually afforded to other than scarcity. With most shared infrastructure, the debt holders (i.e. commercial repayment of their central question is how to divide up limited track financing). capacity among users (while keeping it in good condition). In Gabon's case, more than 90% of volume In short, the envisioned overhauling the pricing is mining traffic, and one company, Comilog, carries regime for the Transgabonais should enable this most of that. This company operates its own trains majestic railroad, one of the largest in the world, to and pays an access fee to SETRAG, a subsidiary of run at higher capacity and further drive Gabon's Comilog that has a 30 year concession to operate the growth.* railway. With the Transgabonais being under-utilized, the fees paid by Comilog mining and other users amount to less than what is needed to catch up on decades of deferred renewals and upgrades. For the railroad to be financially sustainable, a revised pricing structure that involves the mining t l of P e A P d B sector and Gabonese state paying the appropriate share for infrastructure maintenance and renewal About 1FC and SETRAG the Trans-Gabon railrod costs is essential. This action must be accompa- In October 2013, SETRAG, a ComiLog sub nied, however, by a significant lowering of SETRAG group is ERAMET, mandated IFC as the Le can finally be realized operational costs so as to not deter the feasibility of raising the commercial debt needed fort other mining projects in Gabon that will require rail investment plan. The mandate is underw @Antonin services. completed before the end of 2015. 50SSANCTIN-DEBSNS SO UIN BUSINESS SOLUTIONS/ GOVERNING FOR PROGRESS /erayos5 The $20 billion Simandou project offers Guinea a reaL opportunity to transform its economy, making a $5.6 billion contribution that will effectiveLy double the country's gross domestic product. The project also has the potential to ensure that the benefits of big mining LocaL suppLier deveLopment are widely distributed through shared However, to reap these economic infrastructure development and ement and the private sector ne together to build capabilities amongavr ra e capacity building for Local businesses. of stakeholders. Importantly, this pliers. "The state is prioritizing maiiatonf oa content among its objectives," says efla SE Hampered by long delays and the Ebola outbreak, few will have access to opportunitiesa would suggest that making progress on Africa's larg- their capacities." est combined iron ore and infrastructure project has been easy. However, once at full production, annual These local suppliers could benefi payments to the government are forecast to reach up goods and services during both c c to $1.5 billion. operation of the mine. "When fully operational, the project has the potential "That's where we and our partners to double the country's current GDP," says Ismael to prepare Guineans for those opp Diakit6, Managing Director Guinea at Rio Tinto, one says Christian Mulamula, IFC Pri of the artnersin the roject.Officer, Infrastructure and NaturaReors- of the partners in the project.Mining. "At full production, the project will provide direct, indirect, and related employment for about 45,000 people," says Dr Yansane Kerfalla, Guinea's Minister of Mining and Geology,such as health and safety and to asss: hm nmk of Mining and Geology. Yet the project is not just a large mining operation ing toco suplierto t producing 100 million tons per annum at full produc- need commercial partners on the tion that can deliver sizeable government revenues and create jobs. It also represents an integrated approach to economic development. partners - the Republic of Guinea Aluminium Corporation of China (hnlo Growth corridor to establish a training platform fo Crucially, it includes a 650km railway linking south- east Guinea with the coast along what is known as the roughly 500 SMEs have so far ben Southern Growth Corridor; new and upgraded roads "We work in partnership with our and fiber and wireless communications; and a new as local communities, business lea deepwater port at Morebaya river near Forecariah. ties." ezplains Diakit6 "This coll This new infrastructure opens up tremendous opportunities. For example, the port will for the first time allow large cargo ships access to Guinea. This One critical aspect of the Local Su dramatically increases the country's export pros- Program, in terms of long-term st pects, reducing transportation costs significantly and 'training-of-trainers' program. Th increasing trade capacity. that capacity will endure after the Meanwhile, it is estimated that economic activity of at least $3 billion per year could be generated in "That's been really well received," the Southern Growth Corridor, along with up to Sines, IFC Operations Officer base 100,000 jobs in a wide range of sectors. In Guinea's "Because when the project kicks of 2013 Poverty Reduction Strategy Paper, the corridor much demand, it could create a bo has been identified as a key policy tool in promoting of capacity building. This way, ou economic growth. broader." COUNTRIES IN FOCUS rarys,th g 3 Country-m- ocus "i J i AtthotoraphPMinurs. -t b? 4 SUSTAIN CUT TING-EDGE BU-l S N COUNTRIES IN FOCUS,/eray 05 5 A 9 I Jk R Helping local . governments invest money from mines can lead to great infrastructure development including schools and hospitals. Peru's extractive-industry challenges are far from over. IN 2013 Public memories Linger of poor mining practices, billions of SO dollars in royalties left unspent rather than invested in better $ 1 infrastructure and unfulfilled promises of jobs and growth. But improved revenue management and concerted efforts by companies to engage local communities have generated INVESTED IN PERU'S MINING valuable lessons about how investments in extractives can SECTOR r Yanacocha gold mine. be harnessed for inclusive growth. BY 2020 Take-off growth Resentment at the failure to turn royalty dollars into Moreover, debates have arisen over which commu- Part of this was driven by legal requirements.Buth Peru's rich mineral deposits - putting it in the world's roads, schools, or hospitals is not only directed at nities can be considered indigenous under the law, company also sees this as away to help comm $ 6 0 top five producers of copper (with 13% of the world's local governments. Even though companies cannot particularly in the mining areas of the Andes, where access better services. "We cannot be the gove reserves), silver (22% of global reserves), tin, and control this spending, communities often blame them communities are less isolated than those in the ment," says Juan Luis Kruger, CEO of Minsur BILLION zinc - have powered economic expansion. Over the for tbe absence of improvements. Amazon, where oil and gas companies operate. at least our presence can be a way to ensure so EXPECTED TO past five years, real GDP growth has taken off, at an "Tbey're looking at resources coming in and mines Further lack of clarity surrounds private sector tbe social services provided by the governmen BEINVESTEDIN beingbuilt. So a prettybig challenge is unmet expec- participation. While companies must report on tese communities" PERU'S MINING SECTOR "Mining has been the driving force behind Peru's tations," explains Quijandria. tndigenous communities in their environmental Listening and Learning growth in recent years," says Alvaro Quijandria, IFC Secondly, extractives sector companies in Peru face tmpact assessments, the consultation law does not Practice Manager. "And it has brought enormous hostility arising from past incidents. In 2000, for cover companies. resources both to regional and national governments." example, conflicts between local communities and Anaya argues that indigenous communities should Yanacocha corporate office from Lima to Caja In 2013 alone, $10 billion was invested in Peru's min- Minera Yanacoca (ajoint venture between Newmont be able to engage with companies, too. "They need the city nearest its operations, it commission ing sector. By 2020, another $60 billion is expected. and Minas Buenaventura in which IFC has a small to be involved in critical decision tbat determine tbe Centre for Social Responsibility in Mining (C equity stake) arose after a mercury spill along a character of the projects," be says. and CCPM Grupo Consultor to conduct researhit Progressive policies section of road that passed through three villages. Capacity building localneeds. To harness the development potential of Peru's While the company cleaned up after the spill and The study, "Listening to the city of Cajamarc, resources, the government has introduced a number compensated those affected, such incidents have Depie lat chal ee poresihs bn m tn of progressive policy measures. For example, mining undermined trust between communities and mining mprov in ensbewn m aniesan cm- "What came out loud and clear was that they r companies must obtain water and land rights. And companies. mni and in e r mtntngtnvestmentsecreate through the Indigenous People's Consultation Law, shared prosperity te fa ca weweent ingenough opportu- passed in 2011, the government must consult with Moreo despite the Pigo ab Pope's indigenous people on projects that may affect them. overn m As a re th companyoorkenith the cam of Meanwhile, since 2011, local governments in mining "By 2015, lawwill be applied in the mining sector," Arsat Nent. tors and to establish transparency in selectio areas now receive 20% of the royalties companies says Antonio Bernales, Executive Director of Futuro cesses. "In less than two years, we increased t paid to the state, with 50% of this going to the Sostenible, a Peruvian non-profit supporting envtron- He explains that royalty management programs, of local contractors more than 120%," says Ve communities located around the mine, mental negotiation, consensus building, and media- wbich IFC has supported, have helped local author- Another critical lesson to emerge from the studi a Challenges and criticism tion. "It remains to be seen how the government will tties to identify priorities and plan infrastructure tene ocmuiaemr fetvl i commun scommunities. "And not only through one or t Delivering on potential, however, does present James Anaya, Professor of Human Rights Law and Meanwhile, some companies are working to address ple," says Velarde. "Having tbe whole regiona tremendous challenges. Policy at tbe University of Arizona, agrees. "If it's the needs of indigenous communities. For Minsur, engaging with communities makes a big differe.I Firstly, large sums of money are flowing to local implemented adequately, the law could help these one of tbe world's largest tin mining companies, tbis sends a message that we want to be part of Caj administrations that often lack the capacity and communities enormously," says Anaya, Former UN involved conducting a study to identify tbe communi- and to listen to what they have to say." skills needed to make appropriate infrastructure Special Rapporteur on the Rights of Indigenous ties living around its operations. investments. Peoples. "If not, it's business as usual." 56 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS COUNTRIES IN FOCUS /erayo55 A new study by researchers from The University Conflict with local communities can be highly damaging to the bottom line. Our Academia of QueensLand and Shift (an independent, research reveals that delays caused by non-profit center for business and human conflict with communiiscnredt costs of roughly $20 milof erwe o rights practice/Harvard Kennedy SchooL has mining projects valu uncoveed thetrue sale ofthe cots com anies $5 billion. Analysis boneeeg ao disputesd with communities harme p a (andcostsc mof the exposure to no incur when they come inoconflict with LocaL ground" risks revealed$- ilonicot communities. over a two-year perio a double-digit percentareoln n eoe company s annual operatinnennton ot.tet There is a popular misconception that the extreme, projectsare ESTIMATED COST OF local communities are powerless in and become expensiv DELAYS TO MINING the face of large corporations and uncoveredStheetrueescaleafethe costsrcompanie i r e DUey o governments. On the contrary, as PROJECTS DUE TObeen asked t our research findings clearly show, CONFLICT (PER DAY) management teams a effective in waking companies up to the There ~~ w ise aapopuar mhcocptowta up to need to address community interests,. eaeakdi owsol opne Loca communitie arempwernssti Indeed, a number of the industries' d $1i0,000 flagship projects have been abandoned extractive industries ol" during initial or delayed in the face of community commodity prices. Li doexploration opposition, of the business, enviromnad community relationsmoeamsioavnbeer up to The risk of community conflict (and rationalized in many $50,000 ~project abandonment or suspension) research suggests thaevniths $ 00 0is especially high during the feasibility more challenging marktcniin during advanced and construction phases of extractives there is a clear busin exploration projects. These periods can represent investment in capabil dramatic changes for Local communities, manage community c up to when they are Likely to experience environmental, social $2.9 mniti.on large-scale transformations in land use, effects of extractivesprjcs an influx of workers, and uncertainty during operation about the future. At the same time, the ation is tha promised project benefits have yet to b"retosipfitth Ocm uiiscno materialize. Our findings suggest it is b rtofte. nete aeboe not just important, but essential, that down they are often irrievbe Th e invest heavily in community Front-loading" invest coais ns catrelationships can be aheartasula ______________________ rlatons apailit duingthisperod, useful, and underused,srtg o overall cost reductioofre,xwecare not necessarily referriiodtoanncreese Cases of company-community conflict: operating stage investment in social- prgasFhti most important is thataalcommunithes Nagesccapable and well-resourcrmtcomm an infdux orelations and environmen probustd project be s enye tosufrasss not U sss&end impacts, effective mangEmentseniaemha disputes with communities h m py ( d h 20 c Operating and rights-comil with internationally recognizes(humod 25 rights standards] griE processes to address ise eoete 10 escalate. The investmetr mdrn hs Daie M raksRahl avscore areas are likely tolaI obte DeuyDrco,CnrfroilMngn ietr hf outcomes for both commnte n h bs s Operatin 20 Planin no D-los \ cpr:n For more info visit Plann n Pree Operation w csrm.uq.edu.au/ Exr.o rat:o- Construuction Px2 s:, 1 st- Q@REUTERS, Pilar Olivaresy lsr cs ofSTAI roughty $20 mittion per wee for 58 SSTAI CUTINGEDG BUSNES SOLTIOSmKNWLE g projectsEMva/uedbtweenO 59an 긔 \! Resources Selected Tools 04ANCIALVAMAT" TOOL If IFIC It an hQ Mkft r86fftfiDnWA MaBn:h Irl FWFV8 ONO E3 Imp Now SAP's Integrated Performance The University of Queensland's new IFC's CommDev: A repository for IFC's Financial Valuation (FV) tool (Cause & Effect) Analysis research initiative on mining information on enhancing benefits to for sustainability investments and resettlement communities Integrated or triple bottom Line reporting is based This tool helps estimate the financial returr on the idea that a company's performance must In 2015, the Centre for Social Responsibility in CommDev houses selected public documents, site-specific sustainabiLity investments, aLb take into account its social, environmental, and Mining (CSRM) at The University of Queensland tools, case studies, training opportunities, managers to plan, implement and commun economic impacts. These realms are intrinsically will Launch a mining and resettlement research presentations, and resources produced by the value of their social spending. More spe Linked: actions taken in one area affect another. initiative. IFC, partners and other organizations to guide the FV tool aims to enable the justification z Companies can increase their value creation by companies in delivering shared value and quantification of the business case for sociz responding more effectively to the business Land- The initiative will include a publicly available enhancing benefits to Local communities. It is investments as well as the comparative anz scape. But what do we know about the synergies e-Library of mining-specific studies, resources, and a weLL-estabLished repository for information of the portfolio of sustainable business opti between our financial and non-financiaL indicators? articles for industry, policy makers, researchers on community issues related to the extractive It can strengthen the business case for corr Challenging ourselves to go beyond our assump- and civil society groups. As part of the initiative, industries as well as agribusiness, forestry, and investments, enhance Local development tions, SAP Looked into the connections through an CSRM will also develop a global database, conduct infrastructure. outcomes through improved project pLannir integrated performance analysis. a resettlement practitioner survey, edit an evaluation, and help secure ongoing suppor Occasional Paper series, and formulate a range www.commdev.org management and shareholders. "This analysis is still in its early stages but it can be of teaching cases. critical for extractive companies in terms of inte- www.fvtoot.com grated management using a holistic sustainabiLity The aim of the initiative is to: and operational dashboard. We have advanced * Increase understanding of how resettlement risks integrated reporting. The next frontier is using this from mining are being managed by industry; for day to day integrated management at operation- aL levels," says Thomas Odenwald, SustainabiLity * Identify strategies for improving outcomes for Strategies, Senior Vice President, SAP. people affected by mining and resettlement; Visual Capitalist: Infographics on ir. "Extractive companies know very well the interde- * Conduct applied research that informs future The Visual Capitalist site was founded in 20 pendence of technical and beyond technical risks policy and practice; and in the belief that art, data, and storytelling to an operation. Many projects are being stopped due to above ground challenges. We need real-time * Contribute to debates about social due diligence be combined in a manner that makes comp systems that help enlightened managers track and for mining-induced resettlement. THE WW L issues and processes more digestible. The take decisions accordingly, understanding all the populated with exclusive infographics on bL value at stake." CSRM's work is supported by company start-up opportunities and investment trends in min funds from Rio Tinto, AngLo American, Newmont, a few other sectors. www.sapintegratedreport.com and Newcrest. www.visualcapitaList.com www.csrm.uq.edu.au/mining-resettLement 62 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS RESOURCES Resources COMPILED BY VaLerie Prass Selected Publications commuic IFC McKinsey & Company The University of Queensland World Gold Council & The World Bank REVERSE THE CURSE: MINING AND LOCAL-LEVEL RESPONSIBLE GOLD MINING AND THE POWER OF THE MINE: inm ma MAXIMIZING THE POTENTIAL OF DEVELOPMENT: EXAMINING THE VALUE DISTRIBUTION A TRANSFORMATIVE OPPORTUNITY RESOURCE-DRIVEN ECONOMIES GENDER DIMENSIONS OF AGREE- __ FOR SUB-SAHARAN AFRICA MENT MAKING AND BENEFIT The second edition of the This report offers research _ o___ SHARING Responsible Gold Mining and Value This study reveals the potential but insights from the McKinsey Global Distribution report, published by the also the challenges of integrating Institute, McKinsey's Sustainability "---Using research conducted in mining World Gold Council, includes data power and mining. It presents three & Resource Productivity Practice locations including Australia, from 26 countries and 15 member real sector scenarios in Guinea, and the company's Global Energy Papua New Guinea, and Laos, this companies. It helps stakeholders Mauretania, and Tanzania and & Materials Practice. It addresses publication examines how the understand the economics around highlights how shared infrastructure how the world's growing need participation of women affects mining by examining the impact that can provide the anchor demand for resources can be met and agreement negotiation, governance the responsible gold mining sector needed to develop regional projects recommends strategic approaches. and Local benefits. Furthermore, has on development. and public-private investment it outlines factors through which opportunities. It addresses risks gender equality in negotiating, of integration as well as options for implementing, and monitoring policy makers. agreements between communities and mining companies can be achieved. Kellogg School of Responsible Leadership - Shared Value Initiative The World Bank Management Lessons from the Front Line of Sutainailityand EhicsEXTRACTING WITH PURPOSE: PUBLIC PRIVATE DIALOU O . . ,4 .of Sustainability and Ethics MINING COMPANY OF THE FUTURE: CREATING SHARED VALUE IN SPECIFIC SECTORS: DEVELOPMENT PARTNER BY SIR MARK MOODY-STUART THE OILAND GAS AND MINING INDUSTRIES FRAMEWORK SECTORS'COMPANIES AND Sir Mark Moody-Stuart, former COMMUNITIES This paper addresses This report highlights a wide chairman of Royal Dutch Shell of Public Private Dialor array of complex challenges Group and of AngLo American, This report identifies how companies the extractive sector and opportunities in mining, and offers a personal insight in the in the extractive industries can three key principles n presents a new approach for field of corporate responsibility, adjust their approach to social ensure effectiveness companies that want to build lasting ethics and sustainability of the issues in order to deliver business engagement. It iLLustr value through improved social, world's leading companies in the value. It includes specific case pressing issues the it environmental, and economic oil and mining sectors. It also examples from the mining industries and identifies reLevan sustainability. It is a collaboration includes the discussion of Shell's and identifies four challenges that including companies, that includes leaders from the major controversies and serves as deter shared value. Additionally, the Local suppliers, and t industry, contractors, non- a manifesto for responsibility in report highlights common behaviors profits, and representatives from business and leadership. by companies that prevent them indigenous communities. from delivering shared value and offers recommendations on how to change them. 64 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS RESOURCES,FburyO56 Resources SELECTED PUBLICATIONS (CONTINUED) Advisory Board Special Thanks IMF, The World Bank IFC Oscar Chemerinski Special thanks to everyone who ADMINISTERING FISCAL REGIMES A STRATEGIC APPROACH TO EARLY Director Client Leadership Group, provided valuable guidance, support FOR EXTRACTIVE INDUSTRIES: A STAKEHOLDER ENGAGEMENT: A GOOD cIFC and insights. HANDBOOK PRACTICE HANDBOOK FOR JUNIOR BYJC ADRCOMPANIES IN THE EXTRACTIVE IFC BY JACK CALDERINDUSTRIES ~~ Morgan Landy Maria Arsenova, Michel Botzung, o This joint IMF-World Bank handbook This handbook addresses the context Director, Transactional Risk Solutions, Butler, Rebecca Darling, Desmo draws attention to effectiveness in and challenges of Early Strategic IFC Adriana Maria Eftimie, Marina Fe administering revenues from the Stakeholder Engagement faced by Sharon Flynn, Sherry Goldberg, extractives sectors. Moreover, it junior companies at the exploration Adriana Gomez, Brian Gurr, Toni provides useful guidelines to help and preliminary project development ruce Moats Hay, Henriette Kolb, MicheLine Ir policy makers and officials create stages. Juniors generally have Limited John Middleton, Edmond Mjekiqi legal frameworks, organizational resources so inputs need to be D Nowakowska-MiLLer, Joseph Reb structures, collaborations, comprehensive, strategic and tailored World Bank Group Fernando Ruiz-Mier, Zibusiso Si procedures, and transparency when to each stage. The handbook takes the Josef SkoLdeberg, Giridhar Srini, administering revenue from the reader through the process of building Richard Stern, Daniel Street, Ma industry. trust, relationships and gaining and Mary Porter Peschka (Chair) Suarez, Anna Vorotniak, Jan Weherik maintaining a social License to operate Acting Director, Cross-Cutting Robin Weisman, Elizabeth White at each projects life-cycLe stage. Advisory Solutions, IFC ZuLu World Bank PauLo de Sa Kelly Suzanne Alderson, Boubac Manager, Energy and Extractives Global Bocoum, Ekaterina Mikhayova, IFC IFC Practice, World Bank Group Rossignol, Cecilia Sager, Andrew Mau SchLoeffeL LESSONS OF EXPERIENCE - PERU BASELINE ASSESSMENT AND CinsadPrnr LNG: A FOCUS ON CONTINUOUS DEVELOPMENT OF A FISHERIES Bernard Sheahan CinsadPrnr IMPROVEMENT LIVELIHOOD RESTORATION PLAN Director, Infrastructure & Natural Jasmine CLerisme (Sierra RutiLe.,Nc (DRAFT MAY 2014) Reore,IFC Cotts (Newmont), Mamadou Dialo industryisryofMies,.o This pubication ighlightrthe,(GuneantMinstrypofainesg,iNaiGimend Lessons of experience from the m a socl This handbook is intended to be a (ExxonMobil, Deanna Kemp (Un IFC-PERLJ Liquefied Natural guide for projects whose development yof Queensland, Cynthia Langlan Gas (PLNGD project. Through the and operations have an impact on (ExxonMobil], CasiLda MaLagon BruCLA MERt successful application of IFCs fish resources and the fishermen ERTodd MaLan (Rio Tinto, Gonzalo Performance Standards and its who depend upon them. It provides Thisjournalwas commissionedby Quijandria (Minsur], Nick Smith (AruI strong commitment to managing practical tools that may assist projects IFQamember of the World BankGroup. Pablo Taborga (Peru LNG, Saph environmental and social risks aiming to contribute to the sustainable Waters (Total], Katarina Yee (Rock throughout all phases of the project, development of fishing-based The conclusions and judgments contained Brothers Fund] PLNG successfully managed Livelihoods in fishing communities in this report should not be attributed and mitigated operational and within the project-affected area to, and do not necessarily represent the IFC would also Like to thank the reputational. risks related to through their community investment views of, IFC or its Board of Directors or governments of Ireland, Luxemborg their environmental and social programs and/or targeted development th ol ako t xctv ietr,the Netherlands, Norway, and performance. A focus on continuous assistance. othe WoluBnris ex epet IrCtors, Switzerland for their support in improvement and adaptive producing this magazine. management throughout the project, the World Bank do not guarantee the and an emphasis on stakeholder accuracy ofHthe data in this publication engagement and participatory and accept no responsibility for any monitoring are among Lessons that consequences of their use. are useful across sectors. 66 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS RESOURCESVELebNTaFy,FIHE6 Visit our website to read the bios of our contributors and use our skiL finder to identify different areas of expertise: Contributors www.sustainbusiness.org , Ricardo Adame Ismael Diakite Daniel Kaufmann ALvaro Quijandria Group Executive, Global Managing Director, Rio Tinto President, Manager, Trade and Competitiveness Communications, Newmont Mining Guinea Natural Resource Governance Institute Global Practice, World Bank Group James Anaya Revered Seamus P. Finn Dr. Yansane KerfaLLa David Reading Professor of Human Rights Law and Executive Director, International Interfaith Minister, Mining and Geology, CEO, Policy, University of Arizona Investment Group [3iG1 and Director Republic of Guinea p Aureus of Faith-Based Investing for Oblate International Pastoral (OIP) Investment Stephen Baines Trust Juan Luis Kruger Scott RoLseth Advisor to the Chairman and CEO, CEO, General Manager, Hunt LNG Operating Aurizon Dr. Franks Minsur Company, PERU LNG Deputy Director, Centre for Social Raymi Craig BeLtran Responsibility in Mining, Liane Asta Lohde Aaron Rosenberg Senior Environmental Specialist, Oil, The University of Queensland Senior Economist, Infrastructure & Chief, Public Affairs, Gas and Mining Group, IFC Natural Resources, IFC IFC Anita George Antonio BernaLes Senior Director, Energy & Extractives Steve Mann Jer6me Schmitt Executive Director, Global Practice, World Bank Group Vice President, Market Development, Senior Vice President Sustainable Futuro Sostenible Aurizon Development & Environment, TOTAL S.A. Peter M. Graham, CBE Pierre Pozzo di Borgo Managing Director, ExxonMobil J.J. Messner Principal Investment Officer, PNG Limited Executive Director, John Bonoh Sisay Infrastructure & Natural Resources - The Fund for Peace CEO, Sub Saharan Africa, IFC Sierra Rutile Ross HamiLton Director, Environment and Climate Change, Jonas Moberg Lance Crist International Council on Mining and Head, Extractive Industries Stephanie Sines Global Industry Head, Extractive Metals 1ICMM) Transparency Initiative (EITI1 Operations Officer, Infrastructure & Industries, IFC Natural Resources, IFC Stephen Heintz Christian MuLamuLa Mark Cutifani President, Principal Investment Officer, Chief Executive, Anglo American Rockefeller Brothers Fund Infrastructure & Natural Resources, IFC Simon Thompson and non-executive director of Anglo Chairman, American Platinum and the Chairman Tullow Oil plc of De Beers Heydi IsaLes Jane NeLson President, Regional Association for Director, Corporate Social Environmental Monitoring and Protection - Responsibility Initiative, Javier VeLarde GiLLian Davidson AMAR Guatemala Harvard Kennedy School Vice President, General Manager(Peru] Head of Mining & Metals, and Corporate Affairs, Newmont World Economic Forum W Veronica Nyhan Jones Stuart Orr Head, Advisory Services, Infrastructure & Head of Water Stewardship, Sam WaLsh AO Rachel Davis Natural Resources, IFC WWF Chief Executive, Managing Director, Rio Tinto Shift 68 SUSTAIN CUTTING-EDGE BUSINESS SOLUTIONS CONTRIBUTORS/February2015 69 CUTTING-EDGE BUSINESS SOLUTIONS IFC 2121 PennsyLvania Ave., NW Washington, DC 20433, USA AskSustainability@ifc.org #sustainbiz www.sustainbusiness.org C International 1F Finance Corporation Gm~ WORLDBANKGROUP FSC