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Towards Sustainable Mining 101: A Primer (FEBRUARY 2010)


Table of Contents 3

Introduction

3

What Is Towards Sustainable Mining and What Are Its Goals?

3

Context

4

History

5

Business Case for TSM

5

Guiding Principles

6

Performance Elements and Indicators

9

Governance of TSM

12

Verification and Reporting

13

TSM Awards

14

Appendix – Towards Sustainable Mining Guiding Principles

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Introduction This document describes the Towards Sustainable Mining (TSM) initiative: where it came from, what it is and how it works. It is intended to help MAC members and their staff implement TSM within their companies and work with other MAC members as the initiative evolves.

What Is Towards Sustainable Mining and What Are Its Goals? Towards Sustainable Mining is an initiative developed by the Mining Association of Canada to improve the industry’s performance by aligning its actions with the priorities and values of Canadians. TSM provides a way of finding common ground with communities of interest in order to build a better mining industry, today and in the future. TSM is based on a set of guiding principles that are in turn supported by performance elements and indicators (see sections on pages 5 and 6). The initiative is stewarded by the TSM Governance Team, which is led by MAC’s Board of Directors, and by a group of initiative leaders, the points of contact for TSM within each member company. Input and guidance come from the external Community of Interest Advisory Panel.

Context Before the 1990s most industries had little public consultation and limited dialogue with communities and the public. In the mining sector, most individual mines operating near communities had community engagement strategies, but these did not necessarily extend beyond the community boundaries. As the 1990s approached, this all began to change. In 1987 the United Nations World Commission on Environment and Development, commonly known as the Brundtland Commission, presented its vision for sustainable development. The commission’s report, Our Common Future, outlined the UN approach to improving the environmental and social impacts of industrial

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development. By discussing the environment and development as a single issue, the UN sought to develop a common (and global) approach to sustainable development. Five years later, in 1992, the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro brought worldwide attention to environmental issues and the acceleration of environmental damage. The Rio conference sparked global interest and resulted in increased public awareness and governmental responses. As the public learned more about how certain activities affected the health of their communities, more citizen groups and NGOs (such as MiningWatch, one of the first mining-focused NGOs in Canada) were established. These began to exert pressure not only on governments but on industry. In Canada the mining sector, with government support, launched the Whitehorse Mining Initiative (WMI) in the early 1990s. This series of multi-stakeholder discussions on issues related to mining and society helped company executives, civil society and government officials gain trust and better understand each other’s perspectives. The process led to the development of a vision for mining in Canada and several important and still significant policy papers. But unfortunately, while the WMI was a milestone in moving the industry towards sustainability, it had no mechanism to deliver next steps. Around this time a series of high-profile tailings dam failures brought media attention to the Canadian mining sector. The failures, which occurred at international mine sites owned and operated by Canadian companies, led to a CBC news story (“Ugly Canadians�) that documented the environmental damage from overseas mining activities by Canadian companies. These developments were matched by several proposed mine projects that did not proceed because of public controversy. As a result of these events, MAC member companies began discussing the idea of developing an industrybased voluntary initiative. It was within this climate that TSM was born.

History In the late 1990s the MAC Board of Directors set up a task force to consider a sustainability program. Sustainable development issues were researched, stakeholders were consulted and a set of guiding principles was designed. Several key conclusions arose from this initial research. If the mining industry was to improve its credibility and reputation, it must do so on a platform of improved performance and through closer alignment with public values. Trust would be built on a record of performance. From 1998 to 2002 MAC focused on gathering stakeholder input, finalizing the guiding principles and developing the key performance elements to respond to priority areas identified during the initial dialogue. From 2001 to 2004 the protocols were tested, and in 2004 the TSM initiative was launched at the AGM of the Canadian Institute of Mining, Metallurgy and Petroleum in Edmonton.

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Business Case for TSM TSM was born out of a need to improve performance and manage risk and, in so doing, to improve the mining industry’s reputation. There are many reasons why addressing social, environmental and community issues is good for mining companies. Performance improvement: The purpose of TSM is to drive performance improvement in each indicator area. Risk management: TSM gives MAC members a way to understand and manage risk, reduce avoidable losses, identify newly emerging issues and use leadership positions to gain competitive advantage by influencing new regulation. Access to capital: Institutional investors believe that social and environmental risk management can greatly improve a company’s long-term market value. The investment community increasingly regards corporate social responsibility programs, such as TSM, as a sign of a company’s “quality of management.” Social licence: Through TSM, MAC members can influence the attitudes and perceptions of their communities of interest, thereby building trust and using the benefits of positive relationships to deliver a business advantage. Recruitment and retention: Most people want to work for a company whose values are consistent with their own, and there is growing evidence that more people want to work for responsible organizations. TSM helps companies attract and retain a talented and diverse workforce. Innovation and learning: TSM stimulates innovation and learning within companies by helping to identify new market opportunities, establish more efficient business processes and maintain competitiveness.

Guiding Principles At the core of TSM is a set of guiding principles. These principles provide strategic vision for the initiative, influence the thinking behind it and steer its development. The principles (provided in full in the Appendix) begin with this statement: As members of the Mining Association of Canada, our role is to responsibly meet society’s needs for minerals, metals and energy products. To achieve this, we engage in the exploration, discovery, development, production, distribution and recycling of these products. We believe that our opportunities to contribute to and thrive in the economies in which we operate must be earned through a demonstrated commitment to sustainable development.

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Accordingly, our actions must demonstrate a responsible approach to social, economic and environmental performance that is aligned with the evolving priorities of our communities of interest. Our actions must reflect a broad spectrum of values that we share with our employees and communities of interest, including honesty, transparency and integrity. And they must underscore our ongoing efforts to protect our employees, communities, customers and the natural environment. The guiding principles are the foundation on which concrete performance elements and indicators are developed for TSM. The performance elements deal with separate aspects of mining activity, but are linked to one another through the guiding principles.

Performance Elements and Indicators The performance elements and management system–based indicators that back up the TSM guiding principles show Canadians what the industry’s current performance is and how it can be improved. Companies report against the indicators each year in MAC’s Towards Sustainable Mining Progress Report.

EXISTING PERFORMANCE ELEMENTS AND INDICATORS Mining companies in Canada use a variety of systems to manage and govern their business activities. Examples include systems to manage companies’ interactions with the environment (EMS), the quality of their products and services (QMS) and their management information (MIS). Many of the systems used by Canadian mining companies adhere to international standards. The International Organization for Standardization (ISO) offers several standards for good management practice, including ISO 9001 for quality management systems and ISO 14001 for environmental management systems. TSM was developed to help mining companies evaluate the quality, comprehensiveness and robustness of their management systems under four performance elements: !

Tailings management

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Energy use and greenhouse gas emissions management

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External outreach

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Crisis management planning

Developing specific indicators for each performance element is a multi-stage process. The first stage is to develop a framework, which is also a policy statement that sets the parameters for the indicators. Next, a series of indicators is drafted that is reviewed by the the Community of Interest Advisory Panel and approved by the TSM Governance Team and the MAC Board of Directors.

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Each indicator is designed to focus on a different management component of the performance element. The indicators for the four existing performance elements are shown below.

TAILINGS MANAGEMENT

ENERGY USE AND GREENHOUSE GAS (GHG) EMISSIONS MANAGEMENT

EXTERNAL OUTREACH

CRISIS MANAGEMENT PLANNING

Tailings management policy and commitment

Energy use management systems

Community of interest (COI) identification

Crisis management preparedness

Tailings management system

Energy use reporting systems

Effective COI engagement and dialogue

Review

Assigned accountability and responsibility for tailings management

Energy intensity performance targets

COI response mechanism

Training

Annual tailings management review

GHG emissions management systems

Reporting

Operation, maintenance and surveillance (OMS) manual

GHG emissions reporting systems

GHG emissions intensity performance targets

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The next stage is to develop criteria for each indicator to help MAC members assess their TSM performance. The criteria follow a five-level performance rating scale. The levels generally represent the degrees of activity shown below.

PERFORMANCE RATING LEVEL

CRITERIA

1

No systems in place; activities tend to be reactive; procedures may exist but they are not integrated into policies and management systems.

2

Procedures exist but are not fully consistent or documented; systems/processes planned and being developed.

3

Systems/processes are developed and implemented.

4

Integration into management decisions and business functions.

5

Excellence and leadership.

It is MAC’s goal to help all members achieve a minimum of Level 3 in all indicators. This is a long-term goal that is still a work in progress.

SUPPORTING DOCUMENTS Four protocol documents describe the indicators for each of the four performance elements. These documents provide a framework for evaluating performance against the indicators and set out MAC’s general expectations for each performance element. The protocol documents are available in the Towards Sustainable Mining section of the MAC website (www.mining.ca). MAC has also produced several guidance documents to help companies improve their performance. These too are available on the MAC website: !

A Guide to the Management of Tailings Facilities (September 1998)

!

Developing an Operation, Maintenance and Surveillance Manual for Tailings and Water Management Facilities

!

Energy Use and GHG Emissions Management Guidance Document – Final Version (July 2009)

!

Outreach and Dialogue – A Field Guide for Building Shared Understanding for Towards Sustainable Mining (January 2003)

!

Crisis Management Planning Guide (March 2007)

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NEW PERFORMANCE ELEMENTS MAC members are working on four new performance elements: Aboriginal relations: A framework was approved by the MAC Board of Directors in 2008. The Aboriginal and Community Outreach protocol was approved in 2009 and will replace the External Outreach protocol. MAC will begin publicly reporting the 2011 results of the new protocol in 2012. Biodiversity conservation: A framework was approved by the MAC Board of Directors in 2007 and a protocol was approved in 2009. MAC will begin publicly reporting 2012 results in 2013. Safety and health: A framework and protocol were approved in 2009. MAC will begin publicly reporting 2012 results in 2013. Mine closure: A framework was approved by the MAC Board of Directors in 2008. A working group is currently determining how to proceed. The TSM Governance Team has asked initiative leaders to consider two more elements—mining and water, and the international application of TSM—in the near future.

Governance of TSM Various parties, both inside and outside MAC, have large roles to play in TSM. This section describes the roles and responsibilities of the main groups and individuals involved in the governance of Towards Sustainable Mining.

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MAC BOARD OF DIRECTORS According to MAC’s constitution, all full members of MAC must assign a director to the Board of Directors. Responsibilities !

Set overall objectives for TSM

!

Approve all MAC positions and TSM guiding principles

!

Approve all TSM strategy documents

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Approve all TSM frameworks, protocols, indicators and criteria

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Approve TSM annual budget and work plans

GOVERNANCE TEAM The Governance Team is a subcommittee of the MAC Board of Directors that can initiate policy work on all aspects of TSM. The Governance Team meets three times a year in association with the Board of Directors meetings. The June Governance Team meeting is the annual TSM strategy meeting. Responsibilities !

Develop TSM strategy

!

Endorse, for recommendation to the Board of Directors, all frameworks, protocols, indicators and criteria

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Provide direction to initiative leaders on TSM issues, policy, frameworks and criteria

CHAIR OF GOVERNANCE TEAM The Governance Team selects a chair to sit for two years. Responsibilities !

Set agenda for Governance Team meetings

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Chair Governance Team meetings

!

Communicate on behalf of the Governance Team with the MAC Vice President, Sustainable Development on issues related to TSM

!

Approve text of all public TSM documents

!

Sit on the Community of Interest Advisory Panel as a full participating member

INITIATIVE LEADERS Each MAC member company must assign a senior employee as an initiative leader. This person must have a direct reporting relationship (or a direct line of communication) to a MAC Board of Directors member. The initiative leader is responsible for TSM within the company. Initiative leaders meet at least once a year and monthly by teleconference. Responsibilities

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!

Identify or develop appropriate resources to implement TSM throughout the company

!

Be aware of TSM and its subcomponents and how they will affect, and be implemented in, the company

!

Develop and maintain communication links with MAC and other industry initiative leaders to ensure the

!

Develop TSM frameworks, protocols, indicators and criteria, or coordinate company experts’ input into

application of best practices and the success of TSM throughout the membership these documents !

Communicate information about TSM within the company

!

Gather the company’s facility data for reporting on TSM

CHAIR OF INITIATIVE LEADERS The initiative leaders select a chair to sit for two years. Responsibilities !

Set agenda for initiative leader meetings

!

Chair initiative leader meetings

!

Communicate on behalf of the initiative leaders with the MAC Vice President, Sustainable Development on issues related to TSM

!

Sit on the Governance Team as a full participating member

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COMMUNITY OF INTEREST ADVISORY PANEL The Community of Interest (COI) Advisory Panel was established by MAC in 2004. It brings together about 20 individuals and representatives from Aboriginal and labour organizations, communities where the industry is active, environmental and social NGOs and the financial community, along with members of the MAC Board of Directors and other mining industry representatives. The COI Advisory Panel monitors TSM’s progress and serves as an external source of knowledge and experience. As a direct link with civil society, communities of interest and Aboriginal groups, the panel enables open dialogue and engagement with external stakeholders. By bringing together individuals from different backgrounds, the panel functions as an independent mechanism for analyzing the development and implementation of TSM. The COI Advisory Panel meets twice a year. Responsibilities !

Help MAC members and communities of interest improve the industry’s performance

!

Foster dialogue between the industry and its communities of interest

!

Help achieve the goals of TSM

MAC VICE PRESIDENT, SUSTAINABLE DEVELOPMENT The Vice President, Sustainable Development is the main MAC staff person responsible for the implementation of TSM. Responsibilities !

Ensure that all committees (Board of Directors, Governance Team and initiative leaders) are effectively supported (logistics, minutes, preparation, etc.)

!

Coordinate other MAC employees’ input into TSM

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Produce all public TSM documents

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Ensure that all TSM documents are on the website and controlled

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Promote TSM to other mining companies, other industry associations, federal politicians and opinion leaders

Verification and Reporting TSM VERIFICATION SYSTEM MAC is the first mining association in the world to have external verification of its members’ performance. The verification system serves an important purpose: it builds company, COI and public confidence in the validity of companies’ TSM performance.

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The TSM verification system consists of three components: !

Verification of company self-assessments by an external verifier

!

Letter of assurance from a CEO or authorized officer confirming the verified results

!

Annual post-verification review of two or three member companies’ performance by the COI Advisory Panel

Every three years each MAC member has its TSM results externally verified. External verification takes place on a rotating basis, the goal being to have one-third of members undergo the process each year. The external verifier (known as a verification service provider, or VSP) uses standard verification methods to assess a company’s TSM performance. The process includes reviewing relevant documentation, interviewing company personnel and, when appropriate, interviewing local communities of interest.

TSM REPORTING SYSTEM At the end of the process, the VSP issues a verification statement and report. As well, the CEO or authorized officer of the member company provides a letter of assurance confirming that the verification was conducted in accordance with MAC requirements. The CEO letters are posted on MAC’s website (http://www.mining.ca). MAC issues a report on TSM every year. The Towards Sustainable Mining Progress Report and all results are available on the MAC website.

TSM Awards Each year MAC honours those member companies that achieve the highest levels of TSM performance. To receive a TSM award, a company’s TSM results must have been externally verified in the year that the award is being given. The awards are based on the TSM assessment system, which works as follows. For three of the performance elements—tailings management, energy use and greenhouse gas emissions management, and external outreach—facilities are assessed according to the five-level criteria system described above (section 7). Facilities receive awards for a performance element only if they achieve Level 3 or better on all indicators. For crisis management, head offices and facilities both assess their performance against criteria by answering yes/no (met all requirements/did not meet all requirements). Head offices or facilities receive awards only if they answer “yes” to all indicators.

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Appendix: Towards Sustainable Mining Guiding Principles (DECEMBER 2004)

As members of the Mining Association of Canada, our role is to responsibly meet society’s needs for minerals, metals and energy products. To achieve this we engage in the exploration, discovery, development, production, distribution and recycling of these products. We believe that our opportunities to contribute to and thrive in the economies in which we operate must be earned through a demonstrated commitment to i

sustainable development.

Accordingly, our actions must demonstrate a responsible approach to social, economic and environmental ii

performance that is aligned with the evolving priorities of our communities of interest. Our actions must reflect a broad spectrum of values that we share with our employees and communities of interest, including honesty, transparency and integrity. And they must underscore our ongoing efforts to protect our employees, communities, customers and the natural environment. We will demonstrate leadership worldwide by: !

Involving communities of interest in the design and implementation of our Towards Sustainable Mining initiative;

!

Proactively seeking, engaging and supporting dialogue regarding our operations;

!

Fostering leadership throughout our companies to achieve sustainable resource stewardship wherever we operate;

i

MAC draws on the 1987 Brundtland Commission definition of sustainable development: “Development that meets the needs

of the present without compromising the ability of future generations to meet their own needs.” ii

MAC uses the term “communities of interest” to include all individuals and groups who have, or believe they have, an

interest in the management of decisions about MAC operations that may affect them. They include employees, contractors, Aboriginal or indigenous peoples, mining community members, suppliers, customers, environmental organizations, governments, the financial community and shareholders.

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!

Conducting all facets of our business with excellence, transparency and accountability;

!

Protecting the health and safety of our employees, contractors and communities;

!

Contributing to global initiatives to promote the production, use and recycling of metals and minerals in a

!

Seeking to minimize the impact of our operations on the environment and biodiversity, through all stages of

safe and environmentally responsible manner; development, from exploration to closure; !

Working with our communities of interest to address legacy issues, such as orphaned and abandoned mines;

!

Practicing continuous improvement through the application of new technology, innovation and best practices in all facets of our operations.

In all aspects of our business and operations, we will: !

Respect human rights and treat those with whom we deal fairly and with dignity.

!

Respect the cultures, customs and values of people with whom our operations interact.

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Recognize and respect the unique role, contribution and concerns of Aboriginal peoples (First Nations, Inuit and MĂŠtis) and indigenous peoples worldwide.

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Obtain and maintain business through ethical conduct.

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Comply with all laws and regulations in each country where we operate and apply the standards reflecting our adherence to these Guiding Principles and our adherence to best international practices.

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Support the capability of communities to participate in opportunities provided by new mining projects and existing operations.

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Be responsive to community priorities, needs and interests through all stages of mining exploration, development, operations and closure.

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Provide lasting benefits to local communities through self-sustaining programs to enhance the economic, environmental, social, educational and health care standards they enjoy.

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TSM Online Primer  

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