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Host communities are one of Gold Fields’ most important stakeholder groups – their support underpins our social licence to operate which, in turn, impacts our ability to generate sustainable value. Our Group Stakeholder Engagement and Relationship Policy Statement sets out our commitment to building positive relationships with our host communities through open, honest and transparent engagement.
Host communities are defined as those people who live within the vicinity of our operations, who have been or could be directly affected by our exploration, construction or operational activities, and have a reasonable expectation of the duties and obligations of the mining operator. Each of our operations identifies their host communities to secure both their legal mining and social licence to operate.
The diagram below provides details of the three community-focused levers available to us:
At Gold Fields, a strong social licence to operate is embedded in our Group Societal Acceptance Charter and is a prerequisite for generating long-term value for stakeholders. This approach is underpinned by building strong relationships and trust, creating and sharing value, measuring our actions and input and delivering against our commitments.
We believe that by far the greatest socio-economic benefit our operations can have is to create value in the communities that they impact, by addressing their priority needs of:
We aim to maximise the positive economic benefits of mining on our host communities, while avoiding or minimising the negative impacts thereof. Our social investment initiatives are guided by the principle of Shared Value, whereby we address business and social needs in a manner that creates value for both communities and our mines.
Our most critical Shared Value initiatives focuses on host community employment and host community procurement, as these support the economic development of communities and individuals, while also meeting our business needs. As miners, we can make a positive impact by localising procurement, creating jobs and upskilling workers. In addition, by using community investment spend to focus on social and economic development (SED), we can further address social needs in the regions where we operate as identified by the communities themselves.
We conduct independent assessments in our regions that measure the strength of our relationships with our host communities.
Reflecting a positive upward trend in Company-community relationship at our operations, the headline findings of these assessments are reflected below. In 2020, we plan to commission independent assessments of our community support again in Ghana and South Africa.
We furthered our independent measurement of our social return on investment (SROI) and shared value created to identify those investments that strengthen our social licence to operate and to inform future investment. Using our Group SROI methodology, an analysis was conducted on selected projects in Ghana, while Peru will undertake an SROI analysis in 2020.
||Community acceptance improved from 5% in 2012, to 7% in 2014, to 32% in 2016, and to 48% in 2019|
||Community support rose from 33% in 2015, to 52% in 2017, and (for three communities measured) to 62% in 2019|
||Strong community support with a relationship index of 73% at Damang and 78% at Tarkwa in 2015|
During 2018 and 2019, we enhanced our understanding of the value created through SED investments, host community employment and host community procurement by quantifying the impact thereof. In total, our analysis indicated that of the US$2.58bn in value created during 2019, US$782m – 33% – remained with our host communities as shown in the graph below. Comparatively, in 2018, US$687m, or 25%, of the US$2.71bn in total value creation remained with our host communities. In addition, we are creating non-mining jobs through our community investments, which are also listed in the graphic below.
The percentages of national value creation remaining with our host communities differ per region – these are detailed in the regional reports at www.goldfields.com/sustainability. In summary, during 2019, the value creation that remained with our host communities were:
This, we believe, is significant and demonstrates that our mines are delivering ongoing economic benefit to the communities that host them.
Benefits to host communities in 2019
Our host community procurement programme guides us as we support those areas in our operations’ procurement chains where community suppliers can participate. Host community procurement, if implemented effectively, holds benefits both for the communities in which we operate and for our mines themselves. This aligns with our focus on driving Shared Value.
Benefits to the community:
Benefits to Gold Fields:
We have actively increased host community procurement since 2015 in Ghana, South Africa and Peru, and since 2018 in Australia. Of our total procurement spend of US$1.74bn for 2019, 96% was spent by our mines on businesses based in countries where Gold Fields operates (2018: US$1.81bn/85%). US$635m, or 34%, was spent on suppliers and contractors from our mines’ host communities (2018: US$441m/27%). We are committed to sustaining the impact we have made and building on our progress going forward.
The table below outlines the progress made for both in-country and host community spend between 2015 and 2019:
Local and host community procurement
|Local (in-country) spend||Host
|Host community spend|
|1||Australia’s 2018 performance is based on its new host community definition which is aligned with the Group’s definition thereof, where communities are those living within an operation’s direct area of influence. Previous years’ numbers have not been restated. These numbers exclude the Perth office. Gruyere is included from commissioning in mid-2019|
|2||South Deep’s 2018 performance is based on its revised host community definition which is aligned with needs of the regulator, local government and community stakeholders, as well as with the Group’s guidance. Previous years’ numbers have not been restated|
The pillars of our host community procurement programmes are:
We continue to prioritise the employment of host community members at our operations and encourage our contractors and suppliers to do the same. This is supported by education and skills development projects which build a local skills base.
In 2019, our operations set targets to increase their host community employment. At the end of 2019, 55% of our workforce, or 9,269 people, were employed from our host communities (2018: 56%/9,259 people, 2017: 40%/7,516 people). The sharp increase during 2018 and 2019 reflects the prioritisation of host community employment by our Ghanaian operations and the expansion of the definition of our South Deep host community to reflect the 2016 municipal boundary change.
We seek to maintain the current levels of host community employment during 2020 and beyond. Our management teams at the mines are incentivised to achieve long-term host community job creation targets.
Host community workforce1 employed from total workforce (%)
|1||Workforce comprises total employees and contractors. Host community employment data excludes our corporate and regional offices as well as projects|
|2||Australia’s 2017 and 2018 performances are based on its revised host community definition, which is aligned with the Group’s definition thereof, where communities are
those living within an operations’ direct area of influence. Previous years’ numbers have not been restated. These numbers exclude the Perth head office. Gruyere is
included from commissioning in mid-2019
|3||South Deep’s 2018 performance is based on its revised host community definition which is aligned with needs of the regulator, local government and community stakeholders as well as with the Group’s guidance. Previous years’ numbers have not been restated|
In 2019, we intensified our efforts to ensure that our SED projects – those focusing on infrastructure development, education and training, and economic diversification – grow and sustain non-mining jobs as well. We are starting to see traction in this initiative and, during the year, created 504 non-mining jobs for host community members, well over half of them in the agricultural sector. Due to their nature, many of these SED projects do not provide long-term solutions, however, they will create income and a measure of skills transfer as well.
The projects that created significant jobs included:
Host community jobs in the mine value chain
|1||Not measured yet|
We invested US$21.5m (2018: US$25.7m) in SED projects in our host communities during 2019. Our mines have dedicated SED investment funds delivered directly or through our trusts and foundation. The mines also work in partnership with governments and NGOs.
During the year, we completed our largest Shared Value project to date, investing US$27m to rebuild and tar the 33km road between Tarkwa and Damang in West Africa. The road has significant socio-economic benefits for the approximately 100,000 community members living in the Tarkwa-Nsuaem and Prestea Huni-Valley municipalities.
Our SROI analysis of this project indicates that the road will improve the transportation of people, goods and services, as well as boost economic activities in the area. At the same time, the road enables us to transport our employees between the mines safer and quicker. Ghanaian contractors employed 53 members from the host communities during the construction of the road, which is now being managed and maintained by the Ghana Highway Authority.
Other significant Shared Value projects include our investment in water infrastructure and potable water provision in Hualgayoc near our Cerro Corona mine. This addresses one of the key needs of the community and, since we started operating in the area in 2006, we have provided the majority of community households in Hualgayoc with access to clean water.
|Group SED by type 2019||Group and regional SED spend|
Aboriginal and Torres Strait Islander peoples are a key part of our host communities and important stakeholders for our four mines in Western Australia. This includes those groups who have been determined to hold (or are progressing claims in respect of) Native Title rights and interests over the areas on which our sites are located. Aboriginal and Torres Strait Islander Peoples are recognised as the traditional owners of the lands on which we operate.
In 2019, we commenced implementing a consolidated strategy for improving our engagement with our Aboriginal and Torres Strait Islander communities. This strategy is based on three key pillars: building trusted relationships, delivering benefits that have real impact, and demonstrating respect.
Closely aligned with these pillars are the elements of a Reconciliation Action Plan (RAP). Developed by Reconciliation Australia (an independent, not-for-profit organisation), a RAP provides a structured framework through which organisations can support the national reconciliation movement by developing respectful relationships and create meaningful opportunities with Aboriginal and Torres Strait Islander Peoples.We developed our first “Reflect” RAP
during the year as a way to implement our overarching strategy for the region. This document outlines action plans with clear objectives and detailed deliverables. These actions will be implemented throughout 2020 and 2021.
Our first formal Native Title Agreement in the Australia region is with the Yilka People at our Gruyere mine. As part of the agreement, we provide the Yilka People with various benefits, including employment and contracting opportunities. At present, 25 members of the local community work at Gruyere, either directly or for our contractors, which has exceeded initial expectations.
Native Title claims have either been determined or lodged over the whole or significant part of the lands on which our mines are located, most recently in the area of our Granny Smith mine. Our approach is to focus on heritage management and supporting the local community, pending establishment of more formal engagements consistent with our RAP obligations.
Artisanal and small-scale mining (ASM) is present at and around our Damang and Tarkwa mines, though the number of ASM miners is small. ASM largely subsided during 2019, aided by government action against illegal mining. Gold Fields manages these activities through an ASM strategy, which includes patrolling of active mining areas, consulting with affected stakeholders, particularly traditional leaders, negotiating evictions and, as necessary, prosecuting of offenders.
ASM poses a potentially greater risk in a pre-election and high gold price environment. It also comes with significant human rights risks – including human trafficking and the use of children to mine, health and safety risks relating to pit cave-ins, landslides and flooding, and water pollution from mercury, cyanide and siltation which impact downstream communities and the surrounding environment.
Given the changing context, we revised our ASM strategy during the year. Three key focus areas in the updated strategy include a more proactive engagement with community stakeholder groups, supporting the creation of non-mining jobs which provide community members with alternative opportunities, and updating our protection services practice to better identify and manage the infiltration of ASM miners. Our protection services are aligned to the Voluntary Principles on Security and Human Rights (VPSHR).
It is important that we have a clear view of any issues raised by our communities and, therefore, community grievance management is a key aspect of our community relations programme. All of our operations have established grievance mechanisms in place that allow us to handle and resolve the grievances that arise in relation to our activities. The mechanisms encourage and enable community members to raise complaints with us, and obligates our mines to address these grievances within a specified period. Where necessary, we use members from our local communities to act as mediators should our teams not be able to resolve the issue raised.
During 2019, our operations dealt with 77 grievances (2018: 127) lodged by our communities, of which 11 were related to jobs and procurement, 47 social, and 19 environmental grievances. We resolved 56 of these grievances, and are still dealing with the remaining 21.