Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

6.1.4 An integrated approach to growth

In 2012, we established a formal Sustainable Development function within Growth and International Projects. This has been supported through considerable investment in a highly experienced team of senior experts, drawn from both within the Group and externally – as part of our long-term commitment to in-house sustainability and risk management excellence.

This reflects our recognition that in many higher-risk, higher-return new growth environments (p44), sustainable development issues can determine the ultimate success or failure of a project – and thus our:

  • Commitment to taking an ‘integrated management’ approach to our exploration and development projects – with sustainability and risk management actively addressed as a core project activity from the earliest stages
  • Determination to apply common, best practice standards across all of our growth projects – whilst providing the requisite flexibility to allow local teams to deal effectively with local issues
  • Desire to facilitate the seamless transition of growth projects through the exploration and development pipeline to production – including through close coordination with the Group Sustainable Development function
  • Promotion of Gold Fields as the ‘partner of choice’ for governments and communities – based on a demonstrable and repeatable record of responsible and mutually beneficial project execution
“… working together to assure a sustainable context for the timely delivery of our project pipeline …”

Growth and International Projects Sustainable Development Mission

Our Sustainable Development function has already implemented a number of key initiatives to help make our integrated management approach a reality. Key examples include:

  • Development and roll-out of common Growth and International Projects social management standards – addressing issues ranging from stakeholder engagement to grievance mechanisms
  • Mapping and documentation of sustainable development risks and opportunities across all advanced drilling and resource development projects
  • Development of an advanced Sustainable Development Risk Assessment Tool to facilitate the establishment of comparable benchmarking and monitoring across all of our exploration and development projects
  • Rollout of our Crisis Management Plan across all of our exploration and development projects
  • The ongoing rollout of our ‘shared value’ social approach (p141) – including implementation at Chucapaca, Far Southeast and Talas

In 2013, the Sustainable Development function plans to focus on:

  • Completing the rollout of the ‘shared value’ social approach
  • Developing and rolling out new Standards and Tools to assist with land access
  • Developing an integrated Safety, Health, Environment and Community (SHEC) Management System
  • Establishing formal Stakeholder Engagement Plans at every project using a common framework
  • Aligning all sites with the Voluntary Principles on Security and Human Rights – a widely recognised international standard governing interactions between companies and public/private security forces – including the delivery of human rights training to security personnel

Applying strong operational standards

Our overriding commitment to responsible health and safety practices, as well as environmental stewardship, is applied as strongly during the exploration and development process as it is at all of our producing mines – irrespective of location.

Indeed, in 2013 we plan to implement our Energy and Carbon Management Strategy throughout Growth and International Projects (p93) – including the development of related action plans for all our resource development projects.

By building in this philosophy from the start, we ensure best practice operational management is carried through each stage of the development pipeline – and into the ‘DNA’ of the new mine that will sit at the end of the development process.

Our Environment, Health and Safety Management System is certified to the ISO 14001 and OHSAS 18001 management system standards.

Earning our social licence to operate

Gold mining companies increasingly have to pursue growth opportunities in higher-risk locations that do not have an established history of mining. This is largely because of:

  • The ongoing depletion of high-grade deposits in traditional gold mining areas
  • A legacy of global underinvestment in greenfields exploration

As a result, effective risk management – and the securing of a strong, long-term social licence to operate – has in many cases become the key determinant of project success.

Our growth portfolio is not immune from the need to obtain a social licence to operate from local communities. As a result, we have put stakeholder engagement and the generation of shared value at the heart of our exploration and development activities – starting at the earliest stages of discovery. This helps ensure we can navigate the often complex social, political and economic challenges presented by some of our own growth environments – in a careful, sensitive and effective way.

Every one of our early exploration opportunities has the potential to develop into a full-scale mine – and to add quality production to long-term output of the Group. As such, we base our interactions and activities on the assumption that each project will be developed to the point of construction and operation – and place an appropriate value on the establishment and maintenance of our social licence to operate – no matter how small or early the exploration project is.

Stakeholder engagement

Our approach to stakeholder engagement is based on the AA 1000 principles of inclusivity, materiality and responsiveness1 – including extensive and ongoing engagement of community members, traditional representatives, local and national NGOs, government officials and others. More specifically, our approach is characterised by:

  • Well-resourced Community Relations teams embedded within each project
  • Comprehensive and ongoing stakeholder mapping, analysis and monitoring
  • Detailed risk identification, assessment and analysis, using internal and external expertise – including local and international risk professionals
  • The development of comprehensive, adaptable and effective risk management action plans based on monitoring, internal reporting and the pursuit of continuous improvement
Ground inspection at Chucapaca, Peru
Ground inspection at Chucapaca, Peru

This helps ensure that when we do identify those projects that can successfully be taken forwards, our teams:

  • Are already fully aware of – and effectively managing – any related social, economic or political risks
  • Have already established a strong social licence to operate – offering a strong foundation that can be built on as the project moves through the development pipeline
  • Can provide the kind of confidence that facilitates rapid capital investment decisions

Examples of key interactions between Growth and International Projects and local stakeholders in 2012 include:

  • Mechanised ‘orpaillage’ at Yanfolila: In late 2012, small-scale artisanal miners (‘orpailleurs’) operating at the Komana West target began using mechanised crushing machines – posing a significant threat to project viability. Following constructive engagement with the local community consultation committee and the local authorities, the orpailleurs agreed to remove the crushers – and have continued to honour this commitment
  • Public consultation at the Arctic Platinum Project: In October 2012, we carried out our first stage of public consultation at the Arctic Platinum Project as part of our Environmental Impact Assessment (EIA) process. This indicated a positive reaction from local community members
  • Removal of drill rig at Far Southeast: In January 2012, we secured the safe and peaceful removal of a drill rig that had been stuck on-site at Madayman due to an ongoing boycott implemented by local activists. We secured the removal of the rig following detailed consultation and engagement between our community relations team, the local community and the activists

Laying the foundations for shared value

As with our existing operations, our interactions are aimed at the maintenance of sustainable stakeholder relationships based on the ongoing generation of shared value.

Unlike our mines, each exploration opportunity will not necessarily result in the long-term generation of revenues that can be leveraged in favour of community development. Because of this, our early stage exploration projects tend to focus on:

  • Direct and/or indirect employment of local community members to assist with our drilling activities – and the transfer of skills that can support both their livelihoods and our project development activities
  • Procurement of necessary materials and services from local suppliers where possible, including food, transport and accommodation for our exploration teams
  • Targeted social investment that generates lasting community benefits – even after exploration activities have ceased. This includes the construction of local health, education and public utility infrastructure

As exploration opportunities move through the project development pipeline, we are able to commit ever-greater resources to the generation of shared value – including through our participation in formal community development agreements that ultimately link our contributions to project completion and productivity.

We communicate this commitment from the start of our activities (whilst carefully managing expectations around each project’s prospects of success). This ensures there is a clear incentive for local communities to actively support our development of sustainable, profitable and long-term operations in their locale.

Growth and International Projects have started to pilot our shared value approach to local stakeholders from the early stages of project development.

Competitive advantage

We believe our approach – as well as a corporate culture that has had to adapt and learn from a range of historical social, political and economic challenges within our traditional base of South Africa – gives us a long-term, strategic advantage over our peers. This is particularly the case in terms of our ability to:

  • Successfully develop – and add value to – higher-risk, higher-return projects around the world
  • Win new licences by demonstrating to host governments our ability to engage local communities in a constructive way, promote local development and take otherwise challenging projects to production