stakeholders’ views of mining and

www.icmm.com

Stakeholders’ Views of Mining and

Sustainable Development

Highlights report for survey respondents

22 November 2010

www.globescan.com www.icmm.com

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Table of contents

Notes to reader 3

Executive summary 4

Introduction & methodology 8

Current issues 15

Perceptions of ICMM and its member companies 23

Rating transition to sustainable development 29

Advice and feedback for the industry 33

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Notes to reader

This report provides the highlights of the survey research, which will be used by ICMM in strategic planning and future stakeholder engagement.

The survey questions and results reported herein are provided on a confidential basis to respondents. Respondents agree to respect and maintain the confidential nature of this report and agree that this document will not be released to any third party.

All figures in the charts and tables in this report are expressed in percentages, unless otherwise noted.

Total percentages may not add to 100 because of rounding. In the case of stacked bar charts, white

space typically represents the portion of respondents who either answered ―don’t know‖ or did not answer

at all. DK/NA means ―don’t know‖ or did not answer at all.

Where respondents are asked for multiple mentions, the measure is calculated as a percentage of total

respondents and the total can exceed 100.

Comments on differences are usually made only when a statistical significance is observed.

While media responses have been charted for illustration, low sample size precludes making meaningful

comments regarding this group.

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Executive summary

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This is the third stakeholder survey since 2004 that ICMM has commissioned to be conducted by GlobeScan. The objective of this project is to understand the broad issues of the international mining and metals industry and the effectiveness of ICMM in relation to its mandate. These findings are based on a sample of 847 respondents, drawn from ICMM’s database, in 81 nations, across six pre-defined sectors (private sector, public sector, institutions, academia, non-governmental organizations, and media). The online survey was fielded between 24 August 2010 and 18 September 2010.

Eight in ten stakeholders have been involved in or paid attention to sustainable development issues for five or more years. This is slightly higher than 2007.

Objective, methodology, and respondents:

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4


Environmental and social challenges remain important issues for the mining industry.

Several top-of-mind issues and events mentioned in the 2010 survey appear to have not been anticipated

by ICMM stakeholders in 2007. These include the economic crisis, high profile accidents, China’s growing

influence, and corruption scandals.

While these events have not demonstrably contributed to a decline in trust of the industry among

stakeholders, the general perception is that they will have to be dealt with (or are being dealt with) by the

industry as a whole. These events have likely influenced the views of stakeholders this year.

ICMM stakeholders anticipate that future serious issues will be in the areas of environment,

social/community acceptance/relations, governance/regulation, water usage, and resource access. Water

usage is more prominent this year than previously, indicating that water management will become an

increasing challenge for the industry.

Reducing environmental impacts and improving community relations remain the two most important areas.

Stakeholders view improving community relations, health and safety, and revenue management and

transparency as more important than in 2007, but consider reducing CO2 emissions as less important.

Executive summary

Most serious issues and events of past three years:

Issues of importance:

Future issues:

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5


ICMM continues to be seen as a very positive influence on the mining and metals industry. Nearly three-quarters of stakeholders agree that it is successful in moving its members toward higher performance standards. Furthermore, three in five say that ICMM is making a major or medium contribution to raising mining industry standards generally.

Strong majorities of stakeholders in all regions and eight in ten overall view a mining company more

favourably when it is an ICMM member company, a figure comparable to that in 2007.

Stakeholders think that ICMM member companies are doing a better job than other industries in managing the transition to sustainable development. This is similar to the results obtained in 2007. Furthermore, across all regions and sectors, ICMM member companies are seen as performing better than the mining industry as a whole. This is arguably the best evidence of the benefits of ICMM membership.

Executive summary

Perceptions of ICMM:

Rating transition to sustainable development:

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In 2010, the top five recommendations (by theme) that stakeholders have for the industry remain the same

as those in 2007. However, the respective importance of these recommendations has changed; listed in

descending order, they are:

• more transparency/review

• communicate with / listen to communities/stakeholders

• address social/community needs

• impact on the environment

• improve sustainable development efforts.

Issues such as lingering economic uncertainty, high profile accidents/events, and the growing importance of

China are important factors that may be causing stakeholders to consider transparency and stakeholder

engagement as the two top-of-mind recommendations this year. Environmental and social challenges clearly

must still be addressed, but it seems that any efforts must be addressed with more transparency.

Executive summary

Advice and feedback for the industry and ICMM:

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Introduction & Methodology

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Introduction

The International Council on Mining and Metals (ICMM) is an industry group offering strategic leadership toward achieving continuous improvement in sustainable development performance. ICMM commissioned GlobeScan to carry out a survey of its stakeholders this year. The 2010 survey reprises a few of the questions from 2004 and 2007 in order to benchmark progress, but there are also new questions that aim to get a more in-depth understanding of ICMM’s stakeholders. The objective of this project is to understand the broad issues of the international mining and metals industry and the effectiveness of ICMM in relation to its mandate.

Unless otherwise noted, all of the results are reported based on the full sample (n = 847).

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Methodology

ICMM provided GlobeScan with lists of target respondents (stakeholders).

A total of 5,025 people were contacted this year, a 32 percent increase from 2007.

An official survey announcement was sent out by ICMM to target respondents. Survey invitations and

subsequent prompting emails were sent by GlobeScan. The survey was conducted online in English.

Respondents were profiled for their expertise in finance and investment issues, regulatory issues, and

corporate social responsibility. Their sector of employment and experience in mining and development

issues were also surveyed.

Field dates: August 24 – September 18, 2010

Findings are based on a sample of 849 respondents in 81 nations. The 2007 study is based on a sample

of 651 respondents in 65 nations; the 2004 study is based on a sample of 215 respondents in 40

nations.

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Sample size*

*Counts, unweighted

By region and sector, 2010

Academia Public NGOs Institutions Media Total

Europe 125 29 31 24 20 6 235

North America 131 34 30 24 13 3 235

South America 74 7 12 12 5 2 112

Oceania 63 23 11 5 6 2 110

Africa 49 7 14 12 4 0 86

Asia 29 15 12 8 3 2 69

Total 471 115 110 85 51 15 847

Private

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Self-reported level of professional expertise

All Stakeholders, 2010

19

31

39

51

44

33

16

17

8

2

336

Finance/investment

issues

Regulatory issues

Corporate Social

Responsibility

High Medium Low None

Respondents have a higher level of expertise in corporate social responsibility and regulatory issues than in

finance and investment issues.

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Involvement in mining and sustainable development

issues

Less than 1 year

(1)

1 to 4 years (16)

5 to 10 years (30)

More than 10 years

(52)

Not involved in such issues

(1)

All Stakeholders, 2010

A strong majority of stakeholders (82%) have been involved in or paid attention to sustainable development

issues for five or more years. 13

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Respondents

Country representation

• Stakeholders in 81 nations participated, giving the study an even higher level of global coverage than previous years. In order to look at the data in a meaningful and comparable way, we sorted these nations into four regions (similar to 2007): Oceania (including Australia and New Zealand), Europe, North America, and Asia, Africa, and South America (as one region).

Sector representation

• Participants were drawn from six sectors, namely private sector, public sector, academia, institutions, non-governmental organizations, and media. However, as in 2007, the response level was uneven; as a result, the data has been weighted.

Data weighting

• To ensure equal representation of the sectors and countries in the total sample, we applied weights to the data for the six predefined sectors across the four regions within the data set.

• Findings given throughout this report therefore represent the weighted data.

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Current Issues

Below are the survey questions that pertain to this section of the report:

11n. In your opinion, what is the most serious issue or event that the international mining and metals industry has faced in the last 3 years?

13n. To what degree do you think this issue or event is unique to the individual company(ies) or common across the international mining and metals industry?

12n. How has this issue/event and the way it was handled affected your trust in the international mining and metals industry?

2t. What do you think are the most serious issues that the international mining and metals industry will face in the next three years?

3t. How important, if at all, in your view is it for the international mining and metals industry to address each of the following areas?

Legend - Questionnaire Numbering t – tracking question since 2007 tm – tracking question since 2004 N – New question for 2010 In – General questions asking for respondents information

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Summary of current issues

Most serious issues and events of the past three years: The top two issues facing the mining and metals industry continue to be environmental and social challenges.

However, there are issues and events in 2010 that stakeholders did not entirely anticipate in 2007, including the economic crisis and its effects, safety (e.g., miners trapped in a Chilean mine), image/reputation, the BP oil spill, and China’s influence. Recent high-profile incidents like the Rio Tinto bribery scandal were also frequently mentioned in 2010.

Of the 14 issues and events mentioned, 12 are perceived by the majority of stakeholders as either having significant overlap across companies in the industry or being completely common to all companies in the industry. More than half of the serious issues and events cited by stakeholders that occurred in the past three years did not affect trust negatively, due to a widespread perception that the events were out of the industry’s control.

Future issues: Mentions of future (next three years) serious issues are quite similar across regions and sectors. Continuing the trend from 2007, stakeholders expect that environmental concerns, social/community acceptance/concerns, and governance/regulations will remain the most serious. This year, these issues have been joined by a concern over water usage, which was not mentioned by a plurality of respondents in 2007.

Issues of importance: An overwhelmingly strong majority of respondents continue to point to the importance of addressing all performance areas tested.

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Most serious issues/events in past three years

Combined Mentions, All Stakeholders, 2010

A number of unexpected serious issues/events occurred over the past three years, providing an

important context to the views of stakeholders in 2010.

8

21

1

1

2

2

2

2

3

6

7

8

10

12

14

1

Other

DK/NA

Transparency

Rising costs

Rise of anti-mining activism

Indirectly aiding war/conflict/oppression

Human rights issues

China's influence

BP oil spill

Sustainability/CSR

Image/reputation

Health and safety issues

Governance and regulation

Social/community acceptance/concerns

Environmental damage/concerns

Economic crisis and its effects

Anticipated by stakeholders in

2007 as potentially serious

issues facing the industry

Unanticipated by stakeholders

in 2007

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43

43

63

71

74

76

77

78

83

88

96

100

100

56

Human rights issues


Transparency




BP oil spill

China's influence

Image/reputation




Rising costs

Sustainability/CSR

How common/unique were the most serious

issues/events?

―Significant Overlap Across Companies‖ + ―Completely Common to All Companies‖

2010 ―General societal

pressures around

CSR—including

environmental, social

and health, and safety

aspects.‖ Institutions,

North America.

Of the 14 top-of-mind issues mentioned, 12 are perceived by majorities of stakeholders as common issues.

The two issues perceived to be unique to affected companies within the industry are health and safety and

human rights issues.

―Rising energy prices.‖

Public (National

Government), Africa.

―The financial crisis,

which has led to many

companies reducing

their focus/investment

on CR issues.‖ Private

(Consultant), Europe.

―Rio Tinto’s clash

with China.‖ Media,

South America.

2010 (n=651)

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12

15

25

31

32

41

44

50

50

50

56

62

72

20


China's influence

Transparency

Rising costs

Sustainability/CSR






Human rights issues


Image/reputation

BP oil spill

Effect on trust from most serious issues/events

―Slightly Less‖ + ―Much Less Trust,‖ 2010 ―Without a doubt the recent

oil spill by BP.‖ Private

(Mining), Oceania.

―No single event has been

dominant, but the repeated bad

press surrounding mining

companies is accumulative in the

minds of the public, and brings

down its reputation.‖ Institutions,

North America.

―Health and safety issues, specifically

mine accidents around the world, in

China, Chile, and elsewhere. It is a

serious issue whenever mine accidents

are in the news and the industry image is

being affected by these news.‖ Private

(Mining), Asia.

―Human rights violations, usually on the part of local

sub-contractors, that taint supply chains.‖ NGOs, North

America.

While issues that the mining industry has little to no control over (i.e., the economic crisis and China’s

influence) did not impact trust level negatively, the top six issues have caused stakeholders to trust the

mining industry less.

www.icmm.com

2010 (n=651)

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Most serious issues over the next three years


5

5

5

6

6

8

8

9

13

13

16

17

27

28

39

5

Mine rehabilitation/closure

Role of / pressure from NGOs

Health/safety concerns

Economic issues/uncertainty

Human rights issues

License to operate

Meeting market demands

Cost pressures / volatility

Sustainable development

Human resources issues

Financial concerns

Resource access/management

Water usage

Governance/regulations


Environmental concerns

New mentions in 2010

As in 2007, stakeholders expect that

environmental concerns, social/community

acceptance/concerns, and governance/

regulations will continue to be the most serious

issues. Meeting market demands is no longer

a top mention, as it was in 2007, likely due to

the uncertain economic environment.

2010 (n=665) 20

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Issues of importance

55

55

62

63

83

87

35

36

33

33

16

13

Improving revenue

management and transparency

Reducing CO2 emissions that

contribute to climate change

Improving its approach to

health and safety

Using, reusing and disposing of

materials responsibly

Improving community relations

Reducing environmental

impacts

Very important Fairly important

―Very‖ and ―Fairly Important,‖ All Stakeholders, 2010

100

99

96

95

91

90

Reducing environmental impacts and improving community relations are considered to be the most

important issues. 21

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43

67

56

65

72

84

55

55

62

63

83

87

Improving revenue management and transparency

Reducing CO2 emissions that contribute to climate

change

Improving its approach to health and safety

Using, reusing and disposing of materials responsibly

Improving community relations

Reducing environmental impacts

2010

2007

―Very Important,‖ All Stakeholders, 2007–2010

Improving community relations, revenue mgt./transparency, and health and safety are considered more

important than in 2007. Significantly fewer think that reducing carbon emissions is very important. The carbon

finding runs counter to GlobeScan’s 2010 Sustainability Survey but is not surprising given apparent reduced

momentum by governments.

2007 (n=651)

Issues of importance

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Perceptions Of ICMM And Member

Companies Below are the survey questions that pertain to this section of the report:

6t. ICMM sees itself as a leadership group that is establishing higher performance standards for its member companies—especially in environmental, social, health and safety issues. Overall, to what extent do you agree that ICMM is being successful in moving toward this objective?

7t. Another of ICMM’s objectives is to help to improve the performance of the international mining and metals industry generally (not just ICMM member companies) by setting higher standards and providing guidance on good practices. How would you rate ICMM’s contribution to raising this industry’s standards generally?

8tm. How would you rate ICMM’s contribution to improving the international mining and metals industry’s performance in the following areas?

10t. Does knowing that a company is a member of ICMM make you feel more favourable toward it, less favourable toward it, or does it make no difference?


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Summary of perceptions of ICMM and member

companies

Overall, perceptions of ICMM are very positive in 2010. Nearly three-quarters (71%) agree that ICMM is

successful as a leadership group, moving its members toward higher performance standards.

Three in five say that ICMM is making a significant contribution to raising industry standards.

Many specifically indicate ICMM’s impact on the environment, health and safety, social issues, governance

and transparency, as well as the industry’s general reputation.

Respondents generally have a favourable opinion of ICMM member companies.

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76

71

Moving members towards

higher standards

2010

2007

―Strongly‖ + ―Tend to Agree,‖ All Stakeholders, 2007–2010

A strong majority continue to believe that ICMM moves its members toward higher performance standards,

but overall ratings are down slightly from 2007.

Moving members toward higher standards

2007 Subsample: Those who have heard of ICMM

(n=623)

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―Major‖ + ―Medium Contribution,‖ All Stakeholders, 2007–2010

61

67

Raising industry standards 2010

2007

Raising industry standards

2007 Subsample: Those who have heard of ICMM

(n=623)

ICMM gets good marks for raising performance standards of the mining industry overall. There is a slight

positive shift since 2007.

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46

48

54

64

57

72

43

46

52

60

62

63

71

46

40

Responsible use of

materials

Economic benefits to

operation area

Governance and

transparency

Health and safety

performance

General reputation

Social performance

Environmental

performance

2010

2007

2004

―Major‖ + ―Medium Contribution,‖ 2004–2010

ICMM’s most important contribution to the industry is in improving environmental and social performance.

Majorities of stakeholders think that ICMM has improved performance in all areas tested, except in providing

economic benefits in countries where the industry operates and the responsible use of materials.

Performance has generally stabilized since 2007.

ICMM’s contribution to improving industry

performance, by area

2010: Asked full sample. 2007 Subsample: Those who have heard of ICMM (n=623). 2004 Subsample: Those who are aware of ICMM (n=123).

N/A

N/A N/A

N/A N/A

N/A

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71

80

85

73

85

82

80

77

83

84

86

87

88

78

83

85

89

84

85

69

88

NGOs

Academia

Public

Private

Institutions

Media

Europe

North America

Oceania

Africa, Asia, and S. America

Total

2010

2007

Stakeholders in North America and in Africa, Asia, and South America and those in institutions and NGOs

appreciate a company’s ICMM membership more than they did in 2007.

Reg

ion

S

ec

tor

―Much more favourable‖ + ―Slightly more favourable,‖ All Stakeholders, 2007–2010

N/A

Perceptions of ICMM member companies

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Rating Transition To Sustainable

Development


4tm. How would you rate each of the following industry sectors in your country or region in terms of how well it is managing its transition to sustainable development? Legend - Questionnaire Numbering t – tracking question since 2007 tm – tracking question since 2004 N – New question for 2010 In – General questions asking for respondents information

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Rating transition to sustainable development

Stakeholders do not have a positive view of the surveyed industry sectors’ ability to manage the transition to sustainable development. Mining is rated more highly than most sectors.

Most importantly, stakeholders believe that ICMM member companies are doing better than the mining industry in general in making the transition to sustainable development, and have a positive net rating when compared to the mining industry’s net negative rating.

Across all regions and sectors, ICMM member companies are seen as performing better than the mining industry. This is similar to the results obtained in 2007.

The ICMM guidelines and principles for member companies have allowed them to outperform their peers in terms of stakeholders’ perceptions. The better management of transition to sustainable development is arguably the best evidence of the benefits of ICMM membership.

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18

16

38

14

15

19

20

27

32

42

17

22

21

14

Oil & Gas

Chemical

Packaging

Electrical utilities

Mining

Forest

ICMM member companies

2010

2007

―4‖ + ―5 (Excellent),‖ All Stakeholders, 2007–2010

ICMM members’ better performance suggests that ICMM’s principles and guidelines have a positive

reputational effect. Also, relative to other industries, mining gets better marks here than in GlobeScan’s other

research, likely a reflection that the sample is biased in favour of this sector. Ratings have increased since

2007 for several sectors, especially forest products.

2007 Subsample: Those who have heard of ICMM (n=623)

Transition to sustainable development

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16

10

26

22

26

34

27

34

36

39

45

47

50

39

40

40

49

42

39

28

44

27

Academia

NGOs

Public

Institutions

Private

Media

Oceania

Africa, Asia, and S. America

Europe

North America

Total

ICMM members

Mining

―4‖ + ―5 (Excellent),‖ ICMM members vs Mining industry, by Region and Sector, 2010

Stakeholders in regions and sectors view ICMM members’ transition to sustainable development more

favourably than the overall mining industry.

Reg

ion

S

ec

tor

Management of transition to sustainable

development

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Advice And Feedback For The

Industry


14tm. What advice would you give to the mining and metals industry to improve its sustainable development performance?


www.icmm.com

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Summary of advice and feedback for the industry

and ICMM

The top five recommendations (by theme) that stakeholders have for the industry, in descending order, are:

• more transparency/review

• communicate with / listen to communities/stakeholders

• address social/community needs

• impact on the environment

• improve sustainable development efforts.

These are the same as in 2007, however, more transparency/review has replaced impact on environment as the most frequently given advice for the industry.

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Advice for the mining and metals industry on

improving sustainable development performance


The top five recommendations mentioned in

2007 remain as such in 2010. However, in

comparison to the 2007 study, impact on the

environment is no longer the top mention for

improving sustainable development

performance. More transparency/review is the

most frequent advice in 2010.

Top five recommendations in 2007 35

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2

11

1

1

2

2

3

3

3

3

4

5

5

6

7

7

8

12

15

1

D o n't kno w / R efused

Other

Eco no mic develo pment

B eing mo re co mmitted

A ddress health and safety

Wo rk pro act ively / raise standards

Increase awareness o f industry / educate

A ctive part icipat io n

M easure acco mplishments / co mpliance

R aise standards in develo ping co untries / smaller co mpanies

Implement best techniques

P ublicize mo re

M o re fo cus/ co llabo rat io n o n key issues

Integrate SD with co re business

Implement & enfo rce po licies / standards

Impro ve sustainable develo pment effo rts

Impact o n enviro nment

A ddress so cial/ co mmunity needs

C o mmunicate with / listen to co mmunit ies / stakeho lders

M o re transparency/ review

www.globescan.com

More transparency/review:

• ―Be transparent and accountable, releasing trustful data on ESG performance.‖ NGO, South America.

Communicate with / listen to communities/stakeholders:

• ―Work more closely and transparently with stakeholders in a positive way to strike a balance between financial rewards and benefits to the economy and local people. This may seem to reduce returns only but, in the long run, should reduce risk thereby maintaining the same or even improving the return to risk ratio.‖ Private Sector (Consultant), Europe.

Address social/community needs:

• ―Respect and protect people and their rights and remember we have only one earth.‖ Academia, Oceania.

Impact on environment:

• ―Do not leave the agenda of climate change to the politician. Let industry do what it can reasonably do and not under compulsion.‖ Public sector (national government), Africa.

Improve sustainable development efforts:

• ―Walk the talk! There is little evidence that most mining and metals companies put environmental + social + governance (sustainability) issues on a reasonably equal footing as expediency and profit. Unless companies pay greater respect to host communities and deliver better balanced benefits sharing (economic, environmental and social), they will become increasingly unwelcome. On climate change the global community will eventually make decisions for business/industry; industry is incapable of taking voluntary action.‖ Private sector (mining company), Oceania.

Advice for the mining and metals industry on

improving sustainable development performance

Improve sustainable development efforts:

Impact on environment:

Address social/community needs:

Communicate with / listen to communities/stakeholders:

More transparency/review:

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For further information

please contact:

Ben Peachey, Communications Director

[email protected]

Rob Kerr, Vice President

[email protected]


stakeholders’ views of mining and

Documents