Stakeholder relations
Our licence to operate ultimately depends on the quality of our relationships with our various stakeholders - those individuals and organisations who are interested and affected by our business, or who have a material influence on our ability to create value. Stakeholders are an integral part of our business - representing a wide range of interests that both influence and are impacted by our operations - and we seek to develop relationships with them built on open, transparent and constructive engagement. This engagement allows for participative and informed decision making, by balancing the interests, needs and expectations of our stakeholders with the best interests of Gold Fields.
During 2017, Gold Fields reviewed and updated its Stakeholder Relationship and Engagement Policy, which was approved by the Board in February 2018.
We generate and share significant value for the societies in which we operate. Our total value distribution, graphically depicted on Value creation and distribution, details the economic value we create at Group level as well as in our countries of operation. During 2017, Gold Fields' total value distribution to our stakeholders - as measured by the World Gold Council standards - was US$2.85bn, in the form of payments to governments, business partners, its workforce, communities and capital providers.
For details of our stakeholder relationship and engagement management approach policies and guidelines go to www.goldfields.com/sustainability.php Summaries of the stakeholder engagements held by corporate and each region in 2017 are available at www.goldfields.com/societal-stakeholders.php
Investor relations
Central to our vision of being the leader in sustainable gold mining, is the objective of positioning the Group as a focused, lean and globally diversified gold mining company that generates significant FCF, and provides investors with a leverage to the price of gold. We believe that is a prerequisite for improving the confidence with which both buy-side and sell-side market participants view Gold Fields.
Employee relations
People are critical to safe operational delivery and our main human resource objectives are focused on ensuring we have the skills, culture and workforce profile necessary to meet our strategic objectives.
For a full analysis of our stakeholder relationship with our workforce see Fit for purpose workforce and our investors see capital discipline
Government relations
As the issuers of mining licences, developers of policy and implementers of regulations, host governments are among Gold Fields' most important stakeholders. This requires first and foremost good corporate citizenship from Gold Fields in terms of adherence to all relevant legislation, including the payment of taxes and other levies. We are committed to working with governments at national, regional and local level in establishing sound and transparent working relationships that benefit the countries and host communities.
Gold Fields does not provide financial contributions to political parties and lobby groups unless explicitly approved by the Gold Fields Board of Directors in accordance with the Company's Code of Conduct. No political donations were made in 2017.
West Africa region
In March 2016, Gold Fields Ghana entered into a Development Agreement (DA) with the Government of Ghana for both the Tarkwa and Damang mines. The highlights of the agreement include a reduction in the corporate tax rate from 35% to 32.5% and a sliding scale royalty tax based on the gold price. The US$1,255/oz average gold price our mines received during 2017 attracted a royalty of 3%, the lowest in terms of the formula.
The DA applies if Gold Fields spends US$500m at each of the two mines for an 11-year period for Tarkwa and a nine-year period for Damang. The DA can be extended by a further five years should additional investments of US$300m each be made.
The DA was a critical consideration for Gold Fields Ghana to commence with the US$341m capital reinvestment programme at Damang during 2017. This is supported by a further US$1,060m in operational spending over the mine's LoM. This investment has significant socio-economic benefits for communities around Damang. The DA will also lead to cost and cash-flow benefits for the Tarkwa mine, enabling it to invest in future expansion when required.
Another DA commitment by Gold Fields was funding the construction of the 33km road between Tarkwa and Damang at an estimated cost of US$21m. This project is set to be completed later in 2018. Ghana is a key region for Gold Fields and the DA cements our status as one of the largest contributors to the country's fiscus. In 2017, Gold Fields paid US$105m in direct taxes, royalties and dividends to the Government of Ghana (2016: US$86m). The government holds a 10% interest in the legal entities controlling our Tarkwa and Damang mines.
Australia region
During 2017, the Western Australian government twice announced its intention to increase the gold royalty from 2.5% to 3.75%. Gold Fields joined its gold mining peers in the state in supporting the Chamber of Minerals and Energy (CME) with the launch of the 'Jobs First for WA' campaign. The key focus of the campaign was to garner support from the public as well as opposition and cross-bench parties to block the royalty increase in the Upper House, where the WA government does not hold a majority. This campaign was successful and the proposed increase to the royalty tax was not implemented.
To garner ongoing public and political support for the industry, Gold Fields together with West Australian industry peers in the Gold Industry Group, will continue to highlight the positive social and economic contributions the sector makes and how this can be further enhanced through growth in gold mining.
Gold Fields’ tax strategy and policy
Our tax strategy is to proactively manage our tax obligations in a transparent, responsible and sustainable manner, acknowledging the differing interests of all our stakeholders.
Gold Fields has invested and allocated appropriate resources in the group tax department to ensure we comply with our global tax obligations. The Group does not engage in aggressive tax planning and seeks to maintain professional real time relationships with the relevant tax authorities. In material or complex matters the Group would generally seek advance tax rulings, or alternatively obtain external counsel opinion.
Gold Fields has appropriate controls and procedures in place to ensure that we comply with relevant tax legislation in all the jurisdictions in which we operate. This includes compliance with Transfer Pricing (TP) legislation and associated TP documentation requirements, which is governed by our Group TP Policy. Our Group TP Policy is fully compliant with OECD guidelines and is regularly updated and benchmarked by independent experts. Uncertain tax positions are properly evaluated, and reported in terms of International Accounting Standard (IAS) 37 – Provisions, Contingent Liabilities and Contingent Assets. All material uncertain tax positions as per IAS 37 are fully disclosed to, and evaluated by our external auditors.
The Group is subject to South African CFC (Controlled Foreign Companies) tax legislation which is aimed at taxing passive income and capital gains realised by its foreign subsidiaries (to the extent that it was not taxed in the foreign jurisdiction). Therefore tax avoidance on passive income or capital gains cannot be achieved by shifting such passive income to low or tax haven jurisdictions.
The Group does not embark on intra-group gold sales and only sells its gold (or gold-equivalent product) directly to independent third parties at arm’s-length prices – generally at the prevailing gold spot price. Active business income is therefore fully declared and taxed in the source country where the relevant mining operation is located, with the revenue accruing to the source country.
The Group is reporting its key financial figures on a country-by-country basis as from 2017 onwards. The country-by-country reports are filed with the South African Revenue Service, which will exchange the information with all the relevant jurisdictions with which it has concluded or negotiated exchange of information agreements. Gold Fields also reports its total tax contribution and indicative tax rate on a country-bycountry basis Details here of the Annual Financial Report.
Americas region
Our engagement in Peru is focused at local, regional and national government levels to address operational, social and sustainable matters. A business-friendly national government is in power in Lima and our engagement with the relevant departments is largely carried out via the National Chamber of Mines, Oil and Energy, especially on regulatory matters. Gold Fields Peru's legal stability agreement, signed with the Peruvian government in 1997 to facilitate the build-up of our Cerro Corona mine, expired during 2017. In terms of the agreement the taxes applicable to Gold Fields' legal entities were fixed for the 10-year period to allow for profit and distribution to stakeholders. Gold Fields is now subject to the same taxation regime as the rest of the mining sector.
At regional and local levels in the Cajamarca province, which is home to Cerro Corona, some authorities have adopted anti-mining strategies and policies, reflecting wider public sentiment among communities. During 2017, there were 11 socio-economic conflicts related to mining in the Cajamarca province - 20% of all events in Peru. However, thanks to our social and environmental policies as well as extensive engagement with all stakeholders, we have, for the most, received acceptance and support from the regional and local authorities and community members. Our engagement processes will be intensified now that we have extended Cerro Corona's life-of-mine to 2030.
South Africa region
From a regulatory perspective, Gold Fields' operation in South Africa is guided primarily by the Mineral and Petroleum Resources Development Act (MPRDA) of 2002. In 2014, critical amendments to the MPRDA, were tabled by the government in the MPRDA Amendment Bill, but the bill was sent back to Parliament by the country's presidency for further consideration. Parliament has not yet made decisions regarding this and there is a large degree of uncertainty regarding the changes that will be brought about should the amended MPRDA be made law.
Among other things, the proposed MPRDA grants the Minister of Mineral Resources discretionary powers which we believe go beyond the original intent of the Act and are unconstitutional, such as the ability to unilaterally set the terms of the Mining Charter at his/her discretion. Furthermore, the proposed MPRDA will require the consent of the Minister for the transfer of any interest in a listed or unlisted company which holds mining or prospecting rights as well as prescribing the levels of beneficiation for the industry.
One of the key requirements of the MPRDA, which Gold Fields supports, is to facilitate meaningful and substantial participation of Historically Disadvantaged South Africans (HDSAs) in the mining industry. To provide guidance on this open-ended requirement, the Mining Charter, as revised in 2010, was published by the Department of Mineral Resources (DMR), providing for a range of empowerment actions and a corollary time frame. In terms of the Mining Charter, all mining rights holders are required to submit an annual compliance assessment to the DMR on progress made against meeting the annual targets in the Charter. Gold Fields continues to comply with this process.
The DMR presented an updated draft Mining Charter (Mining Charter 3) in February 2016, but a number of important aspects of the draft Charter and associated regulations were and remain disputed by the mining industry, key of which is the Black Economic Empowerment (BEE) ownership element of mining companies and the evaluation of previous BEE transactions carried out by the industry. These issues have remained largely unresolved and the Chamber of Mines, representing the vast majority of mining companies in South Africa, has had to revert to legal actions to uphold the rights of mining companies.
In 2016 the Chamber applied to the High Court of South Africa for a declaratory order to clarify the binding nature of the Mining Charter and the status of previous BEE deals. This hearing was held in October 2017 with judgment reserved.
Despite the lack of meaningful collaboration by the DMR with the industry, the DMR published the Mining Charter 3 in June 2017. The Chamber successfully approached the High Court for an urgent interdict to prohibit the DMR from implementing the provisions of the 2017 Mining Charter pending a judicial review. This review was scheduled for mid-February 2018, but was postponed indefinitely after a request by government, under the new Presidency of Cyril Ramaphosa, for direct dialogue between government, the Chamber and community organisations. These negotiations are ongoing.
Gold Fields supports achieving a solution that is viable to support economic growth and economic transformation while at the same time fostering a sustainable mining industry in South Africa in which investment is encouraged and rewarded.
Mining Charter Scorecard
All mining rights holders in South Africa (including South Deep as the mining rights holder) are required to submit an annual compliance assessment to the DMR on progress made against meeting the annual targets in the Mining Charter.
Gold Fields has updated its Mining Charter performance and compliance in line with an online scorecard created by the DMR in early 2015. The 2017 scorecard is shown on the following page and illustrates Gold Fields achievements against the provisions of an online scorecard created by the DMR in 2015.
As part of its obligations under its mining licence, South Deep also submits a five-year Social and Labour Plan (SLP). The SLP is a key element to achieve the objectives of a company's mining licence and includes projects benefiting communities that are impacted by mining, both in host communities and labour-sending areas. An SLP requires the mining industry to develop and implement comprehensive local economic development, skills and human resource programmes (including employment equity plans and facilitated home ownership) and mine community development.
With regards to our performance against the most recent (2013 - 2017) SLP, South Deep has submitted its annual return to the DMR as at March 2018. Over the five-year period South Deep committed R703m (US$53m) to human resource development (HRD), which equates to 9.3% of payroll costs.
In addition to the HRD investments, South Deep made a R53m (US$4m) developmental investment in both its host communities (R38m (US$3m)), as well as in the labour sending areas (R15m (US$1m)), via the implementation of eight defined SLP Local Economic Development (LED) projects.
A draft SLP for the period 2018 - 2022 was submitted to the DMR in December 2017 for approval, outlining future financial commitments of over R280m (US$21m). Although not approved as yet, South Deep is in talks with the DMR to ensure a speedy completion of the approval process for the South Deep 2018 - 2022 SLP. Some of our major commitments under the draft SLP are:
- A R256m (US$18.8m) human resource development programme, which includes R81m spend on 446 learnerships, 1,224 Adult Basic Education and Foundational Learning Competency programmes (R33m), 1,025 skills development programmes (R35m) and supporting 234 bursars, interns and graduates (R60m)
- A R17m (US$1.3m) infrastructure development programme in the Rand West City municipality, including R5m for the construction of a TVET College in Westonaria and R2.5m for building and equipping a science laboratory at a secondary school in Simunye
- A R8m (US$0.6m) infrastructure development programme in our labour sending areas. R6m of this will be spent on building a community clinic in the Eastern Cape
- Exceedance of employment equity targets at all management and professional levels
- Ongoing commitment to home ownership through facilitated home ownership schemes, including the sale to employees of homes constructed and purchased by the Company
- Continued improvements on procurement targets for capital goods, services and consumable goods
2017 Mining Charter Scorecard
| ELEMENT | DESCRIPTION | MEASURE | 2017 MINING CHARTER COMPLIANCE TARGET | PROGRESS AGAINST TARGETS AS AT 31 DECEMBER 2017 | ||||||||
| Reporting |  |
Report on the level of compliance with the Revised Charter for the calendar year | Documentary proof of receipt from the DMR | Annually | South Deep annual submission | |||||||
| Ownership | |
Minimum target for effective HDSA ownership | Meaningful economic participation | 26% | 35% | |||||||
| Housing and living conditions | |
Conversion and upgrading hostels to attain the occupancy rate of one person per room | Percentage reduction of occupancy rate towards 2014 target | Occupancy rate of one person per room | 0.91 person per room ratio | |||||||
| Conversion and upgrading hostels into family units | Percentage conversion of hostels into family units | Family units established | 100% | |||||||||
| Procurement and enterprise development | |
Procurement spent on BEE entity | Capital goods | 40% | 80% | |||||||
| Services | 70% | 83% | ||||||||||
| Consumable goods | 50% | 88% | ||||||||||
| Multi-national suppliers' contribution to the social fund | Annual spend on procurement from multi-national suppliers | 0.5% of procurement value | 0.86% | |||||||||
| Employment equity | |
Diversification of the workplace to reflect the country's demographics to attain competitiveness | Top management (Board) | 40% | 33%3 | |||||||
| Senior management1 | 40% | 88% | ||||||||||
| Middle management | 40% | 58% | ||||||||||
| Junior management | 40% | 49% | ||||||||||
| Core and critical skills2 | 40% | 73% | ||||||||||
| Human resources development | |
Developing requisite skills, including support for South Africa-based research and development initiatives intended to develop solutions in exploration, mining, processing, technology, mining, beneficiation as well as environmental conservation | Human resources development expenditure as a percentage of total annual payroll (excluding mandatory skills development levy) % | 5% | 10% (R184m) | |||||||
| Mine community development | |
Conduct ethnographic community consultative and collaborative processes to delineate community needs analysis | Implement approved community projects | Up-to-date project implementation | 90% project implementation. In total R58m was spent on socio-economic development (SED), including the South Deep trusts 11% of SED spend went to the implementation of LED projects in the SLP | |||||||
| Sustainable development and growth | |
Improvement of the industry's environmental management | Implementation of approved environmental management programmes (EMPs) | 100% | 100% An EMP performance assessment was completed and submitted to the DMR in Q4 2016. The 2017 assessment is in progress and submission to the DMR is planned for Q4 2018 |
|||||||
| Improvement of the industry's mine health and safety performance | Implementation of tripartite action plan on health and safety | 100% | 86% | |||||||||
| Utilisation of South Africa-based research facilities for analysis of samples across the mining value chain | Percentage of samples in South African facilities | 100% | 100% | |||||||||
| Beneficiation | |
Contribution towards beneficiation | Added production volume contribution to local value addition beyond the baseline | Section 26 of MPRDA (% of above baseline) | Gold is refined by Rand Refinery to a 9995 fineness rating. As such, there is little value-added potential in gold industry jewellery. Fabrication is small and fragmented and cannot compete effectively with other global markets | |||||||
| 1 | Includes members of the SA Regional Executive Committee and the South Deep mine Executive Committee |
| 2 | Core skills include A, B and C graded employees in the miner and artisan categories as well as officials with core skills for mining and/or working in a core mining area(s) |
| 3 | HDSA representation as at 31 December 2017. Post the appointment of a replacement director this has increased to 50% as at 22 March 2018. |
Community value creation
We recognise the importance of solid community relations to our social licence to operate. We are committed to avoiding, where possible, or minimising and managing, the negative impacts of operations on our communities, while also maximising the positive benefits. Through active stakeholder engagement and our Shared Value development approach, our focus goes beyond just spending to the positive social and business impacts that our social investments can deliver.
Gold Fields' approach to creating positive community relations comprises an informed understanding of our operating contexts, stakeholder priorities and associated risks. We actively manage social risks and impacts and build relationships with our stakeholders through our stakeholder engagements. We focus on meaningful social investment to address the needs of our host communities. We strive to create Shared Value through host community procurement and host community employment.
Host communities, are identified by each of our operations for the purpose of securing our mining licences - both legal and social. These communities are directly affected by and have an expectation regarding our activities. They typically include the communities nearest to our operations and, in South Africa, labour-sending areas.
In 2016, all operations prepared community relations and stakeholder engagement strategies and three-year plans focused on maintaining the social licence to operate in their host communities. The regions are progressing with implementation of their three-year community relations and stakeholder engagement plans. Progress highlights for all of our mines is outlined in the infographics on Stakeholder relations.
For details of our community relations and stakeholder engagement approach, policies and guidelines go to www.goldfields.com/sustainability.php
Measuring our impact and relationships
We invest in our host communities through various social investments that are currently measured largely by spend. Given the limitations on investments, Gold Fields is committed to investing in the projects that have the greatest impact on our host communities. To this end, we want to employ a standard methodology, across all our operations, which measures socio-economic metrics, return on social investment and shared value created in order to determine which investments strengthen our social licence to operate, informing our future investment.
To more effectively measure change and value impact Gold Fields has instituted socio-economic impact assessments, which was piloted at South Deep during 2017. Undertaken by a global consultancy it comprised a socio-economic baseline study of host communities impacted by the mine as well as a review of 15 of our 40 social investment projects at South Deep. The review revealed that 10 of the projects have a social return on investment greater than the inputs invested. These findings are integral in developing South Deep's community investment strategy and project selection for 2018 and beyond. Thereafter we plan to roll out the methodology in Ghana and Peru. A summary of the findings are outlined in the infographic on Stakeholder relations.
To understand the quality of our relationships with our communities, we conduct independent assessments to gauge the strength of our relationships with our host communities. In South Africa and Ghana, we use the ICMM Understanding Company Community Relations (UCCR) tool, while in Peru we have used the IPSOS research tool to assess our mine-community relationships.
Reflecting a positive upward trend in company community relationship at our operations, the headline findings of these assessments are reflected below:
Grievance mechanism
We are committed to timeously and effectively addressing community issues and concerns. To this end, all our operations have established mechanisms through which stakeholders can share their grievances about Gold Fields, its actions or the behaviour of its employees on social, environmental and human rights issues. Mediation by a third party, usually from the local community, may be involved should our teams not be able to resolve the grievance. During 2017, the regions dealt with 76 economic, social, and environmental grievances lodged by host communities, of which 65 were resolved and 11 are still being dealt with. The regional breakdown is in the infographics on Stakeholder relations.
SED spending
We focus on socio-economic development (SED) initiatives and Shared Value programmes to create and share value with our host communities. These projects create positive socio-economic impacts for host communities by targeting their priority needs, which we have identified as:
- Employment
- Skills and enterprise development
- Environmental rehabilitation
- Access to water
Programmes and projects to our host communities are delivered directly or through our trusts and foundations, often in partnership with government, NGOs and, in South Africa, with selective mining peers.
Gold Fields' spending on SED programmes - US$17m in 2017 (2016: US$16m) - reflects the Group's direct social investments spend in host communities. The investments - which are detailed for each region on Stakeholder relations are made in the following areas:
- Conservation and environment
- Infrastructure
- Education and training
- Health and wellbeing
- Economic diversification
Group SED spend by type 2017
Group SED spend
Shared Value programmes
Shared Value is created when companies take a proactive role in simultaneously addressing business and social needs. Shared Value goes beyond mitigating the potential harm in a company's value chain - it is about identifying new opportunities for economic success by incorporating social priorities into business strategy and working collaboratively with multiple stakeholders to find solutions to various socio-economic and environmental issues. A key component of this approach is to ensure that the value created is shared by the business and the community.
Gold Fields' regions currently have six Shared Value projects either already running or at implementation stage - which are profiled in the infographics on Stakeholder relations. The most critical Shared Value programmes for Gold Fields are host community employment and procurement.
In 2017, our Shared Value approach was further embedded in Ghana, South Africa and Peru through the implementation of our three-year host community procurement and employment plans prepared in 2016. For both procurement and employment, we are increasingly moving the benefits from in-country to host community.
Host community employment
Where feasible, we strive to employ host community members at our operations. This enables alignment between the interests of host communities and our mines, expanding of local value generation and growth of local available skills. As our ability to recruit such workers may be limited due to the available skills in host communities, we are committed to local education and skills development. From 2018 onwards growth in total host community employment has been added as a component to the bonus plans of senior mine management.
The number of host community members - including both employees and contractors - working at each of Gold Fields' regions is set out on the table below. In 2017, all operation set targets for host community employment and these were exceeded. 40% of our workforce or 7,516 people are employed from our host communities. While this is significantly lower than in 2016, it reflects a change in definition in Australia, where host communities are now defined as those living within an operation's direct area of influence. Previously, due to the fly-in, fly-out nature of most of our operations we included Perth as part of our host community area.
Host community workforce1 employed from total workforce
| Region | 2017 | 2016 | 2015 | 2014 | |||||
| Peru | 28% | 23% | 29% | 24% | |||||
| Ghana | 68% | 72% | 67% | 66% | |||||
| Australia2 | 29% | 95% | 90% | 94% | |||||
| South Deep | 16% | 13% | 14% | 12% | |||||
| Group | 40% | 48% | 59% | 57% |
1 Workforce comprises total employees and contractors
2 Australia's 2017 performance is based on its new host community definition which is aligned with the Group's host community definition where communities are those living within an operation's direct area of influence. Previous years' numbers have not been restated
Host community procurement
To enhance the national and host supplier base, which is especially important given the remote locations of several of our mines, and to create employment in those communities, we procure goods and services from the countries and host communities in which we operate, where feasible.
During 2016, we developed three-year host community procurement and employment plans for Peru, South Africa and West Africa to increase the proportion of sustainable host community procurement and employment, thus driving shared value.
Of our total procurement spend of US$1.86bn for 2017, 88% or US$1.62bn was spent on businesses based in countries where Gold Fields has operations (2016: US$1.36bn/83%). US$774m, or 45%, was spent on suppliers and contractors from the mines' host communities (2016: US$558m/38%). (See table below).
Local and host community procurement
| Local (in-country) procurement | Host community procurement | ||||||||||||||
| Region | 2017 | 2016 | 2015 | 2014 | 2017 | 2016 | 2015 | 2014 | |||||||
| Peru | 90% | 89% | 87% | 88% | 7% | 8% | 7% | 5% | |||||||
| Ghana | 85% | 79% | 64% | 72% | 13% | 7% | 9% | 6% | |||||||
| Australia1 | 99% | 99% | 97% | 99% | 79% | 71% | 66% | 69% | |||||||
| South Deep | 100% | 100% | 100% | 100% | 18% | 14% | 10% | 9% | |||||||
| Group | 94% | 92% | 85% | 91% | 45% | 38% | 35% | 39% | |||||||
1 Excludes Yilgarn assets
In the regions
West Africa
Ghana has a proactive national supplier programme for its two mines, which sees these operations procure about 85% of its goods and services from companies registered in Ghana. Their total procurement spend during 2017 was US$560m. Host community procurement spend for 2017 was US$71m, against a target of US$61m or 13% for the year. Tarkwa and Damang will reset targets for procurement spending for the years 2018 to 2020 on completion of an independent goods and services assessment, as well as a community analysis.
Americas
In Peru, host community procurement spend for 2017 was US$11m, 7% of total procurement spend, against a target of US$13m, or 8.5%, for the year. It will be applying the Group host community procurement guidance from 2018. A system is being implemented to track all host community jobs from 2018.
The implementation of the second phase of the host community supplier development programme was undertaken in 2017. With the assistance of Swisscontact, a business-oriented independent foundation for international development cooperation, improvement plans have been developed for 77 host community businesses. Thirty-four of these businesses increased their competitiveness obtaining an average 3.1 rating (on a scale of 1 to 4). Eight local suppliers have obtained contracts from customers other than Gold Fields. Five local companies were awarded bidding processes by the government. Fourteen local companies received certification from the Peruvian Ministry of Production that assures good quality in their processes and procedures, becoming the first local companies to be certified as mining suppliers.
In Chile, an analysis of labour in the Atacama region was initiated as input to the development of a programme to capacitate host community suppliers for the Salares Norte project.
Australia
During 2017, Australia joined the Group host community procurement programme. Australia is implementing a series of strategic goals for procurement processes to enable local and indigenous participation in the value chain. Currently, Perth suppliers are included as host community but from the end of 2017 onwards, Australia will change the definition to exclude Perth and to restrict it to five host Shires, namely Laverton, Menzies, Kalgoorlie, Coolgardie and Leonora (with a total population of 36,723) and indigenous groups affiliated with Gold Fields' operations. Under the revised definition, the host community procurement spend target for 2020 will drop from 70% to 20%.
At Gruyere, plans are in place to involve indigenous communities in procurement and employment opportunities. Current indigenous employment at Gruyere is approximately 10% of the workforce. Contractors are required to submit a plan, inclusive of employment targets, as part of the tender process. Local employment targets have been set at 25%, 7% and 8% for the camp contract, the bulk earthworks as well as the engineering, procurement and construction respectively. Local participation is a fundamental consideration in the appraisal process for the mining contract.
South Africa
South Deep's host community procurement project exceeded its target of R430m in 2017. The project's vision is to have 25% of total procurement spend, or R500m (whichever is greater), redirected to the host community in 2018 and 500 new jobs created by 2020. The number of host community suppliers to South Deep increased to 88 (2016: 83) during 2017. South Deep's total procurement spend for 2017 was R2.5bn (2016: R2.6bn) and host community procurement spend was R448m (2016: R356m), 18% (2016: 14%) of total spend.
The South Deep Business Development Centre (BDC), which provides local community enterprises with training and support, complements the host community procurement project. During 2017, 130 enterprises received training via the BDC covering financial and business management, marketing, computer skills, entrepreneurship and legal and governance. In addition, 175 enterprises attended workshops run by the BDC, which covered similar topics and provided information on how to become part of the Gold Fields supply chain.
HUMAN RIGHTS
Gold Fields currently applies a formal human rights policy statement, both in dealings with our employees as well as our host communities. The policy statement, embedded in our Code of Conduct, is aligned to the relevant ICMM Principles on Human Rights and the United Nations' Protect, Respect and Remedy Framework.
The Code of Conduct, which is fully supported by the Gold Fields' Board of Directors, guides our business ethics and values. The human rights policy statement applies to all directors, employees and third parties (including, among others, suppliers and contractors) and regular training and awareness is offered to all stakeholders.
Under the policy statement, Gold Fields commits to:
- Not interfering with or curtailing others' enjoyment of human rights
- Defending, where possible, employees and third-party individuals and groups (as defined in our community policy) against human rights abuses
- Taking positive action to facilitate the entrenchment and enjoyment of human rights
The policy statement notes our commitment to uphold the highest standards of human rights within our workforce, including, among others, freedom from child labour, compulsory labour and discrimination, harassment, freedom of association as well as the right to collective bargaining.
Given the nature of Gold Fields' footprint and activities, our human rights activities are currently managed through the following functions: legal and compliance, sustainable development, human resources, procurement, community relations and security.
We carry out human rights analyses on our own activities. Our business relies on multiple contractors to carry out mining, development, construction and other forms of work on its operations. All contractors are included in our health and safety management systems, to help ensure that they benefit from safe and healthy working conditions. Our contractors also have to commit to the policies and procedures of Gold Fields, which include the Code of Conduct and the human rights policy statement.
In our engagement with communities, we focus on respecting the following key human rights: Indigenous Peoples' rights, minimisation of involuntary resettlement (subject to fair compensation where unavoidable), artisanal and small-scale mining as well as respectful security enforcement.
All contractors, employees and other stakeholders wishing to report human rights violations can make use of our confidential, third-party whistleblowing hotline or the grievance mechanisms that has been established at all our operations. Where such complaints are made, we will pursue the matter appropriately. In addition, the Group has developed a third-party screening solution to establish risk profiles of external suppliers and contractors. Among other criteria, the tool screens new and existing contractors and suppliers for social- or labour-related violations or transgressions, of which human rights form part.
Gold Fields' protection services teams work with both private and public security providers - for the effective and responsible protection of workers and assets. All private security contractors receive human rights training during induction. A study was carried out during 2017 to assess the gaps between our current systems and the UN Voluntary Principles on Security and Human Rights. While no substantive gaps were identified, a decision was taken to close the gaps that were found during 2018.
We are consistently looking at ways to improve our business and this includes evolving human rights through the identification of salient human rights issues in the Group that are relevant to our business and the global mining industry. As such, the definition of human rights activities will be widened to include activities where we, as Gold Fields, impact on our stakeholders. Once identified and contextualised, we will roll out a process to ensure we meet not only our own internal specific initiatives but that they meet the UN Guiding Principles as well.
Gold Fields is committed to responsible materials stewardship. In this context, we support global efforts to tackle the use of newly mined gold to finance conflict. We have voluntarily adopted the Conflict-Free Gold Standard of the World Gold Council (WGC). The standard is applied at all relevant locations through assurance audits. Although we withdrew our WGC membership in 2014, we have and will continue to apply both the Standard and its guidelines. Further information is available at www.goldfields.com/sustainability-reporting.php.