Our 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 and distribute enduring value. Our Group Community Policy Statement sets out our commitment to develop mutually beneficial relationships with our host communities through transparent and constructive engagements, which are based on shared respect and trust.
Host communities are defined as those people living within the vicinity of our operations who have been or could be directly affected by our exploration, construction or operational activities, and who have a reasonable expectation of our duties and obligations as the mining operator. Each operation within the Group identifies their host communities to secure both their legal mining and social licence to operate. In total, some 460,000 people live in 60 communities surrounding our eight mines.
At Gold Fields, a strong social licence to operate is embedded in our Group Societal Acceptance Charter. It is also a prerequisite for generating enduring 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. In 2020, our regions successfully implemented government and community action plans – thereby ensuring delivery of the Group and regional Society Acceptance Charters.
In 2016, in addition to creating in-country economic impact, we also started an initiative aimed at creating benefits for our host communities. At that point, loss of our social licence to operate was ranked fifth among our Group top 10 risks. This risk dropped from our top 10 risks in 2018, which has remained the case due to the successful implementation of our host community procurement, job creation, socio-economic development (SED) and environmental management strategies. Loss of social licence is still considered a top mining industry risk.
As part of our 2020 reporting suite, we will publish our second Report to Stakeholders (RtS) during April 2021. The report outlines, at a high level, the contributions we make to our key stakeholders and recent developments impacting our relationships with them.
The diagram below details the three community-focused levers available to us:
HOW WE CREATE VALUE FOR OUR COMMUNITIES
- Support areas where community suppliers can participate
- Identify community suppliers with ability to supply the mine
- Provide skills development to close capability gaps
- Build skills base in community workforce through education, bursaries, etc
- Prioritise the community as the first option for hiring staff
- Encourage contractors/suppliers to employ from the community
- Create non-mining jobs linked to our SED investment projects or in partnership with suppliers
Creating Shared Value in our host communities
The outbreak of the Covid-19 pandemic has exacerbated economic hardships in our host communities, who now increasingly expect that our mines will help alleviate their burdens by providing economic or other assistance. The circumstances of this past year have reinforced our awareness of our communities' priority needs. We believe that the greatest socio-economic benefit we can have on our host communities is to create value by addressing the following priority needs:
- Employment, particularly for youth
- Skills and enterprise development
- Infrastructure, such as education, healthcare, water facilities and roads
- Environmental rehabilitation
We aim to maximise the positive socio-economic and environmental benefits of mining on our host communities while avoiding or minimising the adverse impacts thereof. Our social investment initiatives are guided by the principle of Shared Value, whereby we address business and social needs to create value for both communities and our mines.
Our most important Shared Value initiative focuses on host community procurement and job creation, as we believe this will support the economic development of communities and individuals while also meeting the needs of our business. As a global mining company, we can make a positive impact by localising procurement, creating jobs and upskilling workers. In addition, by using community investment spend to focus on SED, we can further address regional social needs as identified by the communities themselves.
Between 2016 and 2020, we significantly enhanced our understanding of the value created through our SED investments, host community employment and host community procurement programmes by quantifying the impact thereof. Over the past five years, we have created between US$600m – US$800m in community value every year. Cumulatively, this amounts to over US$3.54bn which, we believe, presents a significant investment in the economic wellbeing of our host communities. Based on our analysis, of the US$2.85bn in value created during 2020, US$676m, 28% of the total, remained with our host communities as shown in the graph below.
We have incentivised our management teams with ESG targets since 2017, including host community value creation. From 2021 onwards, a larger portion of incentives will be allocated to ESG goals.
HOST COMMUNITY VALUE CREATION
Host community procurement
Our host community procurement programme guides us as we support those areas in our operations' supply chains where community-based enterprises can participate. Host community procurement, if implemented effectively, holds benefits for both the communities in which we operate and for our mines themselves. This aligns with our focus on driving Shared Value.
Benefits to the community:
- Builds the capacity of local companies to take advantage of mining industry spend
- Provides employment and enhances the livelihoods of host communities through increased incomes
- Enhances the development of small and medium-scale business nodes in host communities
- Improves the skills of host community youths to meet the current and future skills needs of our mines
Benefits to Gold Fields:
- Increases supply base and reduces risks related to supply of critical inputs
- Reduces inventory and, as such, the locking up of capital
- Reduces cost and lead time in procuring inputs
- Develops a pipeline of skilled personnel in host communities
- Secures and enhances our social licence to operate
Since 2016, we have actively increased host community procurement in Ghana, South Africa and Peru and, since 2018, in Australia. Our mines have annual targets that drive our host community procurement spend. Our total procurement spend amounted to US$1.78bn in 2020, of which 96% was spent by our mines on businesses based in the countries where we operate (2019: US$1.74bn/96%). We spent US$536m, or 29%, on suppliers and contractors from our mines' host communities against a target of 25% (2019: US$635m/34%). The decrease in spend was as a result of Covid-19 and the change in mining contractor at Damang. Our Salares Norte project, which was in pre-contraction during 2020, actively pursued procurement of goods and services from its host communities in line with the approved project plan. We are committed to further maximising our impacts going forward.
The table below outlines the progress made for both in-country and host community value creation between 2019 and 2020:
Local and host community procurement
Host community employment
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 2020, our operations set targets to maintain their host community employment. At the end of the year, 53% of our workforce, or 8,752 people, were employed from our host communities (2019: 55%/9,269 people). The decline from 2019 reflects the change in mining contractors at our Ghanaian mines, measures that were implemented to address the impact of Covid-19 at Cerro Corona, and an increase in Fly-In, Fly-Out (FIFO) workers due to employee turnover at our Australian mines.
We seek to maintain the current levels of host community employment during 2021 and beyond, as in most of the countries in which we operate each job has a significant multiplier effect. As such these jobs are critical for the 460,000 residents that live in our host communities.
In the table below, we set out the number of national employees and host community members – including both employees and contractors – working in each of Gold Fields' countries of operation in relation to our total workforce.
Beyond creating employment opportunities with our mines or contractors, or in the wider supply chain – which can only create a finite number of jobs – we are also seeking to create non-mining jobs, particularly those linked to SED projects. Non-mining jobs can continue to provide benefits to host communities beyond mine closure, thus assisting them with social transitioning.
In 2019 and 2020, we intensified our efforts to ensure that our SED projects – those focusing on agriculture, infrastructure development, education and training, and economic diversification – also grow and sustain non-mining jobs. We are starting to see traction in this initiative and, during the year, created 672 non-mining jobs for host community members, with well over half of them in the agricultural sector (2019: 504). Due to their inherent nature, many of our SED projects do not provide long-term solutions, however, they do create income and a measure of skills transfer.
The following projects created significant and sustainable jobs:
- 421 farming jobs at the Lima rural agricultural development projects in the Eastern Cape province of South Africa, which is home to about 16% of our workforce
- 16 farming jobs in communities surrounding our Cerro Corona mine in Peru
- 33 farming jobs in the Youth in Organic Horticulture Production (YouHoP) programme at our Damang and Tarkwa mines in Ghana
Local and host community employment
|Country||National employees – 2020||2020||Host community workforce1 – 2020||2020||2019|
We invested US$17.2m in SED projects in our host communities during 2020 (2019: US$21.5m). The 22% decline in total SED spend during 2020 compared with 2019 is due to a delay in implementation of projects in Australia, Ghana and Peru because of Covid-19. Our mines have dedicated SED investment funds delivered directly or through our trusts and foundation. Our mines also partner with host governments, donors and NGOs.
Some of the significant Shared Value projects we implemented during the year include our ongoing investment in water provision in Hualgayoc near our Cerro Corona mine. This investment 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. During 2020, we also implemented the first phase of a three-year reforestation and water harvesting project together with the Ministry of Agriculture and the district municipality. The project will benefit 16,000 people by increasing crop production of subsistence farmers through the construction of 2,000 micro-reservoirs and irrigation systems.
Providing IT equipment to high school students, Tarkwa, Ghana
Our operations continue to actively support host communities and governments in their efforts to control the Covid-19 pandemic and assist those that have been impacted by it. We tailored the support we provided to each country's unique circumstances while also collaborating with our business partners and peers. Our support to communities included:
- Donating to well-managed and transparent government or industry response funds
- Donating medical and sanitising equipment
- Distributing meals to vulnerable people
- Supporting local government efforts, such as street sanitisation
- Distributing masks, sanitisers, education leaflets and videos
- Contributing to radio and television campaigns to educate, raise awareness, dispel myths and prevent stigmatisation and gender-based violence
Covid-19 support to host communities and governments
Measuring our impact and relationships
Our regions regularly conduct independent assessments to measure the strength of our relationships with host communities.
Over the years, we have seen a positive upward trend in Company-community relationship at our operations, as reflected by the headline findings below. The findings of the independent assessments of our community support in Ghana, which was delayed due to Covid-19, will be available in H1 2021.
We expanded our independent measure of our social return on investment (SROI) and Shared Value created to identify those investments that strengthen our social licence to operate which, in turn, inform future investment strategies. After a delay in 2020 due to Covid-19, Peru will undertake an SROI analysis on selected projects in 2021 using our Group methodology.
||Community acceptance improved from 5% in 2012 to 7% in 2014, 32% in 2016, and 48% in 2019|
||Community support increased from 33% in 2015 to 52% in 2017, 62% in 2019 (three communities measured), and 61% in 2020 (five communities measured)|
||Strong community support with a relationship index of 73% at Damang and 78% at Tarkwa in 2015|
Working with Indigenous communities in Australia
In Australia, we recognise Aboriginal and Torres Strait Islander peoples as the traditional owners of the lands on which we operate, and acknowledge and respect their continuing culture.
In considering our strategy for engaging with Aboriginal and Torres Strait Islander peoples, we chose to partner with Reconciliation Australia (an independent, not-for-profit organisation) in 2018 to embark on its Reconciliation Action Plan (RAP) programme – a structured framework whereby organisations can support the national reconciliation movement by facilitating the development of respectful relationships with and creation of meaningful opportunities for Aboriginal and Torres Strait Islander peoples.
Gold Fields developed its Reflect RAP in 2019 and formally launched the programme in early 2020. Our efforts focused on building and strengthening relationships, raising awareness of the RAP process and the broader reconciliation effort, and finding opportunities to listen and learn from the lived experiences and aspirations of the Aboriginal and Torres Strait Islander people from our communities. This has enabled us to better understand the barriers to progress in key areas, such as employment and procurement, and the options available to effect change. Moving these strategies forward will be an important component of our second (Innovate) RAP, which will be finalised in 2021.
We continue to work closely with the Yilka and Sullivan Edwards people, the determined Native Title holders of the land on which Gruyere operates. In terms of our agreement with these parties, we continue to look for ways to sustain and grow employment and business opportunities, as well as support health, education and other programmes for the local Aboriginal community. It is particularly encouraging to see the Yilka Aboriginal Ranger programme come into fruition, and we welcome the opportunity to support and promote the group's conservation and land management activities.
While our relationships at our other operations in Australia have traditionally been focused on Aboriginal cultural heritage awareness and management, the RAP broadened the scope of our engagements and provided opportunities for participation in important community events.
We support a range of activities and programmes that directly benefit our Aboriginal communities. In Leonora and Laverton, two communities near our mines, we are proud to support the Shooting Stars educational programme through the Gold Industry Group of Australian gold miners. This programme uses sport and other tools to encourage greater school engagement among Aboriginal girls and young women. We also participate in a local industry group based in Kalgoorlie, near our St Ives mine, to support greater economic development for Aboriginal and Torres Strait Islander people and businesses in the Goldfields region.
Stakeholder engagement remains a key focus area for the Australian region. An important lesson from the tragic and irreversible destruction of ancient caves located at Juukan Gorge in Western Australia in 2020 is that ongoing and transparent stakeholder engagement must be closely aligned with legal approval and heritage management processes.
In response to the findings from the Parliamentary Inquiry into the Juukan Gorge incident, we are reviewing and updating our engagement plans and implementation guides to ensure we continue to cultivate strong relationships with traditional owners that support the early resolution of emerging concerns and priorities.
We are also updating our current processes for identifying, evaluating, and communicating risks associated with Aboriginal cultural heritage to ensure we embed cultural heritage risk assessment and management into our decision-making processes. As part of this, we obtained independent advice on best practice approaches to conducting Aboriginal cultural heritage surveys, which will form the basis of a new Regional Aboriginal Cultural Heritage Standard in 2021.
We continue to support the building of capacity and understanding of Aboriginal cultural heritage at our operations through cultural awareness training, which is facilitated by Aboriginal and Torres Strait Islander people who share insights and knowledge of their country – the lands on which we operate.
We have extensive protocols in place for the recording, impact assessment and protection of identified Aboriginal cultural heritage sites, primarily through our ground disturbance permitting process. Where potential impacts to cultural heritage sites from mining activities could not be avoided or mitigated, we have complied with the Section 18 approvals prescribed by the legislation prior to any disturbance. We do not intend to action any existing approvals, nor apply for any new approvals at this stage.
Through the Chamber of Minerals and Energy (CME), we are participating in an extensive consultation process with respect to the reform of current heritage legislation, with the new Aboriginal Cultural Heritage Act expected to be implemented later this year. We agree that the current legislation requires modernisation to reflect the expectations of both Aboriginal and Torres Strait Islander people, broader society and land users (including mining companies), and welcome this long-awaited reform.
Consistent with our strategy, we support the current approach proposed by the Western Australia government, which seeks to embed agreement-making on Aboriginal cultural heritage matters into the legislation. We will continue to participate in the review and consultation process of the draft legislation and supporting documents to ensure the legislation achieves improved outcomes for all stakeholders in this important area. We are also currently making progress in the negotiations with our Aboriginal stakeholders at several of our operations to formalise robust cultural heritage management protocols.
While no Indigenous Peoples have a relationship with our Salares Norte project site, as confirmed through the project's environmental approval process, we have engaged with the Colla Indigenous communities located some 70km from the project since 2015. We have signed social development agreements with the key Colla communities, and we are holding regular meetings to present our progress against our project plan and to identify and address any concerns from these communities. Nine sites of cultural significance to the Colla communities have been identified near the project access road – none of which are declared national monuments. We have a community relations and heritage conservation plan in place to protect the identified sites.
Potential environmental impacts
Our activities have the potential to adversely impact surrounding communities. We have policy statements and guidelines in place that provide the framework to enable us to avoid and, where we cannot avoid, manage the environmental impact on our host communities.
It is critical that we have a clear understanding of any issues raised by our communities. Community grievance management is therefore a key component of the community relations programme. All our operations have established grievance mechanisms in place that enable us to address and resolve any grievances that arise from our activities. These mechanisms encourage and enable community members to submit complaints to us. Our mines are then obligated to address these grievances within a specified period. Where necessary, members from local communities act as mediators should our teams not be able to resolve issues raised.
During 2020, our operations dealt with 139 grievances (2019: 77) lodged by our communities, of which 75 were related to jobs and procurement, along with 52 social and 12 environmental grievances. 80% of these grievances were resolved within the agreed timeframes. The outstanding grievances are at Cerro Corona and relate mainly to delayed payments by contractors.
|Potential impacts from our activities||Policies and guidelines|