presentation on sustainable development and corporate responsibility issues

PRESENTATION ONSUSTAINABLE DEVELOPMENT

ANDCORPORATE RESPONSIBILITY

ISSUES

29 April 2003 Anglo American

Presentation Team

Sir Mark Moody-Stuart – Chairman John Groom – Safety, Health and EnvironmentRussell King – Human Resources and Business DevelopmentNick Von Schirnding – Investor and Corporate AffairsEdward Bickham – External Affairs

Safety, Health & Environment

Dr John Groom

Global Mining Initiative• Mining, Minerals and Sustainable Development project• GMI Conference, Toronto• International Council on Mining and Metals

- Characterised by intensive engagement with stakeholders- Provided a solid basis for our participation at the Johannesburg World

Summit on Sustainable Development- Anglo American played a key role

International Council on Mining and Metals

• SD Charter– A commitment to 10 key principles– A commitment to be measured against them

• International engagement– Global Reporting Initiative– Community Engagement tools project with the World Bank– World Bank Extractive Industries Review– Extractive Industries Transparency Initiative

Report to Society

Scope now expanded to become an SD Report

• Business practices & performance• Workplace

– Safety– Occupational health– Human resources

• Environment• Society

– Community health– Social & community initiatives– Economic contribution

Benchmarked against the GRI core indicators

Environment• Risk based prioritising

– Tackling global issues: using local illustrations

• Energy and greenhouse gases– Much improved linkage to units of production– Climate change policy– Value-at-risk study completed

• ISO 14001 certification now covers 51% of turnover. The target is full certification by end of 2004.

Environment

• Water management– Still reporting in aggregate– Future focus will be on individual businesses where water

issues are a priority– For example, Lisheen, Namakwa Sands, Mantos Blancos

and Mondi Paper have innovative water-use strategies

Biodiversity• Clear strategy• Site biodiversity action plans to be developed

(where not already in place)– Link to environmental impact assessment and closure planning

• Corporate contributions to the global challenge– Kew Millenium Seedbank– Active partners in the ICMM/IUCN dialogue on mining and protected

areas– Key sponsor of the UNEP World Conservation Monitoring Centre in

Cambridge

Environmental Targets

Besides the management system targets(ISO14001 and FSC Certification), our business units are setting clear, quantifiable environmental targets that are of greatest relevance to their particular circumstances and their communities.

Many such specifics are listed on p. 51 of our report.

Technological Innovations• Process R&D and alternatives to traditional smelting

(HBMS zinc pressure leach)• Sulphate reducing bacteria for water treatment at

South African coal mines• Coal-bed methane recovery for use (Australia)• Energy efficient technologies• New smelting process will reduce Anglo Platinum

SO2 emissions by 55 000 tonnes/year by end of 2004• Fuel cell technology: joint venture with Johnson

Matthey

Legal Compliance• 281 incidents were reported involving the regulatory

authorities (336 in 2001)• Fines paid totalled $162,000 ($187 000 in 2001)

Verification• KPMG conducted their third review of our SHE

performance and reporting• Nine sites visited, and previous site visits reviewed• Methane emission reporting remains incomplete

Safety I

2000 2001 2002 20030.0

1.5

1.0

0.5

2.0

2.5

0.00

0.10

0.08

0.06

0.04

0.02

Lost time injury frequency rates (LTIFR)Fatal injury frequency rates (FIFR)

0.64

0.87

2.26

1.50

0.020

0.0330.031

Safety II• 127 000 employees: c.65 000 contractors in

managed operations• 47 fatal injuries – down by 33% from 2001• Lost-time injuries down by 42%• Introduction of Golden Rules• Safety performance an element of Executive and

Management remuneration

Much more remains to be done

Safety III• Challenging new targets set• Visible felt leadership• Training and the promotion of safe behaviour• The development of leading indicators• The fostering of a true safety culture• OTTO: Zero Tolerance, Target Zero• Our clear goal is to do business without

hurting people

Occupational Health• Developed integrated industrial hygiene/

occupational health management guidelines: roll-out commenced

• Performance audited against the guidelines will provide leading indicators

Human Resources

Russell King

Key Issues

• Decentralised business model but with strong corporate values

• Corporate role to advise and facilitate

• Sceptical about utility of data aggregation

Key Data• 127 000 employees in managed operations of which:

– Africa 85 000– Europe 30 000– The Americas 8 500– Australasia 3 500

• Contractors c. 65 000

• 2002 – no major industrial disputes

• Support freedom of association – 70% union membership

• Training – minimum 2.2% of total employment costs

Human Resources – Priority Challenges I

DIVERSITY

Ensuring equal opportunities throughout the organisation globally

Gender• c. 10% of employees are women• c. 15% in management roles

South Africa• Employment Equity• By 2008, 40% of managerial employees should be HDSAs (c. 22% in 2002)• Longstanding programmes to develop HDSA managers, including through

educational bursaries c. 600

Human Resources – Priority Challenges II

• Talent Management– Key aspect of diversity agenda– Part of senior management performance contracts

• Performance Management and Development – Now cover about half of employees

• Employee Communication– Developing two-way dialogues

South African Challenges

Black Economic Empowerment

Nick Von Schirnding

South African Challenges

• Minerals Development & Petroleum Act

• Empowerment Charter– 15% equity or production ownership in 5 years– 26% equity or production ownership in 10 years

• Empowerment Scorecard– Ownership; beneficiation; procurement; employment equity; human

resources development; housing conditions and community development

• Money Bill - consultation

Anglo’s Black Economic Empowerment Commitment

0

500

1000

1500

2000

2500

1999 2000 2001 2002

ZAR Millions

• US$1.8 billion in BEE transactions completed

• Procurement expenditure of US$800 million from black-owned businesses

• Small business development– Currently invested in 20 companies; 1 000+ jobs– Khula Mining Fund

• Chairman’s Fund support for education

Social, Community andEconomic Issues

Edward Bickham

Human Rights• Strong commitment in ‘Good Citizenship’ Principles

– Support Universal Declaration– Commitment to make representations on behalf of employees and

communities

• Major issues in Zimbabwe

• Consideration of adherence to ‘Voluntary Principles on Security and Human Rights’

• Child labour

• Development of ‘best practice’ in relation to indigenous peoples

2002 - Controversies

• Zambia – withdrawal from KCM

• Colombia – Resettlement

• Congo – UN Special Panel

HIV/AIDS - I

Total ManagementCommitment

HIV/AIDS policyand strategydevelopment

Developing culturally appropriateprevention messages

Tackling socio-economicfactors

Establishing partnerships

Sustainingawarenessand education

1

2

3

45

Challengingdenial andstigma

Situating prevention in a communitycontext

67

8

9Linking care to prevention

Rigorous scientificreflection

HIV/AIDS - II• Voluntary counselling and testing

• ART initiative for employees (24% infection rate)

• Treatment protocols in place

• 30 sites now registered for ART

• Estimate 3 000 on treatment after 12 months

• Seeking to broaden coverage of ART

• Emphasis on community partnerships– Zimbabwe– Western Cape– KwaZuluNatal

Communities I - Objectives

• Engagement and consultation

• Enhance capacities / economic upliftment

• Improved management of socio-economic impacts

• Community projects to reflect local priorities

Communities II - Engagement• Community Engagement Plans – 3-year rolling:

– Consultation– Management of key issues– Complaints procedures– Contribution to local economy– Support for community projects– Resources and accountabilities

• Growth in Community Liaison Panels

• 2002 – Community Engagement Guidelines and ‘Good Neighbours’ publication

Communities III – Managing Impacts

• Social Impact Assessment for new projects

• Rapid Socio-Economic Assessment Methodology – pilot projects:– Mondi Forest, SA– Catalao, Brazil– German Creek, Australia

Communities IV – Economic Upliftment

• Indigenous management and local labour (eg, Skorpion)

• Creative use of procurement

• Income generation schemes

• Small business development model

Corporate Social Investment

• CSI expenditure US$28.8 million

• 0.9% of pre-tax profit• Priorities: education,

health and community development

• Chairman’s Fund leading social investment vehicle in South Africa

• ENGAGE campaign – employee volunteering

CSI Expenditure

0

5

10

15

20

25

30

35

1 2 3 4

$ m

illio

n

1999 2000 2001 2002

Distribution of Benefits Arising from Economic Activity During 2002 ($m)

Suppliers 8,730

Employees 2,796

Dividends 1,011

Company Tax 621

Interest 300

Economic Contribution

Taxes and Other Payments to Governments 2002

0100200300400500600700800900

Africa Europe North andSouth

America

Aust/Asia

$m

Managed companies Non-managed companies

Payments to Governments

Anglo American's Regional Economic Contribution 2002

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Africa Europe North and SouthAmerica

Australia / Asia

$m

Value added (non-managed)Value added (managed)Payments to suppliers, indirect taxes and royalties (non-managed)Payments to suppliers, indirect taxes and royalties (managed)

‘Good Citizenship’ – Assurance and Reporting

Business Principles

Supply Chain• contractors• suppliers• contract compliance

• Launch Briefings• Training• Integrate into management processes• Provision for whistle- blowing

Internal audit to carryout reviews on request

Operations’ AnnualLetter of Assurance

Divisional CEOsLetters of Assurance

Anglo Americanplc

‘Report toSociety’

KPMG Roll-outReview

Embedding ‘Good Citizenship’ Principles

• Integration into decision-making

• Development of Programmes– Communities– Employee communication– Business integrity– Human rights– Whistle-blowing– Complaints

• Supply Chain Issues

• Improvement of social KPIs

Reporting: What Next?

• Stakeholder round-tables on evolution of Report

• Progress towards more divisional and local reporting

• Examining greater use of web as medium for detailed reporting