Community Relations and Creating Shared Value

SOCIAL LICENCE TO OPERATE

Recognising the importance of solid community relations to our social licence to operate, Gold Fields is committed to minimising, managing or avoiding, where possible, the negative impacts of its operations on 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 its social investments can deliver.

Gold Fields’ community relations approach is informed by an understanding of our operating contexts, garnered through ongoing risk assessments and stakeholder engagements. In 2016, plans to address material social risks were developed and implemented in each region. These risks were often linked to the local and national elections, which were held in all our operating regions. Our operations were sensitised to this challenge through their community relations risk assessments undertaken in 2015 and 2016.

Building Relationships

Gold Fields actively identifies and regularly engages with the representatives of the following groups in a formal and informal manner:

  • Central, regional and local government and their agencies
  • Community-based organisations
  • Traditional authorities
  • NGOs
  • Civil society
  • Organised labour
  • Business

Summaries of the engagements held by each region in 2016 are available at www.goldfields.com>investors

In 2016, all operations prepared community relations and stakeholder engagement (SE) strategies and three-year plans focused on maintaining the social licence to operate. These were informed by the Gold Fields’ community relations and SE guidelines, which together with our community policy and charter can be found at www.goldfields.com>sustainability.

All operations have established mechanisms through which communities can share their grievances about Gold Fields, its actions or the behaviour of its employees on social, environmental and human rights issues. During 2016, the regions dealt with 92 economic, social, human rights and environmental grievances by their communities, of which 82 were resolved and ten are still being dealt with. Operations in Peru, South Africa and West Africa also regularly publish and distribute communication materials to stakeholders, keeping them informed about our community relations activities and initiatives.

Subsequent to community relationship assessments in Peru, South Africa and West Africa between 2014 and 2015, action plans were implemented during 2015 and 2016 to address any gaps and further strengthen community relations. These plans are currently being rolled out in our communities. A second round of assessments commenced in late 2016 in all our regions. The International Council on Mining and Metals’ (ICMM) ”Understanding company-community relationship toolkit” is being piloted for these assessmentsat our South African and Ghanaian mines.

Social Investment

As not all of the value created through royalties and taxes at national level benefits host communities, Gold Fields focuses on socio-economic development (SED) initiatives and Shared Value projects to create and share value at community levels. These sustainable development projects create positive socio-economic impacts for host communities by targeting their priority needs of employment, skills and enterprise development, environmental rehabilitation and access to water. Programmes and projects are delivered directly or through our trusts and foundations, often in partnership with government, NGOs and, in South Africa, through an alliance with our peer, Sibanye Gold.

Gold Fields’ spending on SED and Shared Value programmes – US$16m in 2016 (2015: US$14m) – reflects the Group’s direct social investments spend in host communities. The investments – which are detailed for each region on p102 – 107 are made in the following areas:

  • Conservation and environment
  • Infrastructure
  • Education and training
  • Health and wellbeing
  • Economic diversification

A significant proportion of the salaries and wages paid to employees also finds their way back into our host communities.


SED contributions by type
2016 – total: US$16m1

 
trainingSED contributions by type 2016 – total: US$16m11
1 This includes spending from the South Deep trusts and by our projects


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.

Our Shared Value approach is based on four key pillars:

  1. Strategic interventions, to proactively address socio-economic challenges that can drive community tensions, NGOs activism or more restrictive regulations
  2. Integration to proactively address socio-economic challenges
  3. Participation in collaborative action with other stakeholders
  4. Transparency regarding Gold Fields’ economic contributions to its host societies in line with World Gold Council guidelines

Gold Fields’ regions currently have six Shared Value projects either already running or at implementation stage – which are profiled in the infographics on p102 – 107.

Host Community Employment

Gold Fields aims, where feasible, 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, it is committed to local education and skills development.

Our Shared Value objective for 2016 was the development of three-year local procurement and employment plans for Peru, South Africa and West Africa.

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 2016, all operation set targets for host community employment and these were met or exceeded, except at South Deep where the definition of ‘host communities’ was adjusted from residential address to place of origin – this was in line with the definitions required under the mine’s Social and Labour Plan.

Host Community Employment
  % Host community workforce¹ employed
from total workforce
Region 2016 2015   2014
Peru 23% 29%   24%
Ghana 72% 67%   66%
Australia2 95% 90%   94%
South Deep3 13% 14%   12%
Group(3) 48% 47%   47%
1 Workforce includes the total number of employees and contractors
2 For our Australian operations, Western Australia is classified as a host community due to the extremely remote nature of this region and the fact that many employees fly into the operations from Perth. Hence the high host community employment percentages relative to the other regions
3 Changes in definition of workforce applied at South Deep in 2016. 2015 and 2014 figures restated accordingly

Host Community Procurement

Where possible, Gold Fields seeks to procure goods and services from the countries in which we operate, and, where feasible, its host communities. This contributes to enhancing the national and local supplier base, which is especially important because of some mines’ remote locations, and creating local employment.

Of total 2016 procurement spend, US$1.36bn or 83% was spent on businesses based in countries where Gold Fields has operations (2015: US$1.27bn/76%). Within this figure, US$558m, or 41%, was spent on suppliers and contractors from the mines’ host communities (2015: US$514m/40%).

Building on the work done in 2016, the operations are working towards meeting their host community employment targets developed as part of the three-year host procurement and employment plans.

South Deep’s host community procurement project exceeded its target of R330m in 2016. 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 actual total procurement spend for 2016 was R2.6bn (2015: R2.0bn) and host community procurement spend was R356m (2015: R192m), 14% (2015: 10%) of total spend and 85% improvement on 2015. The number of host community suppliers to South Deep increased to 83 (2015: 76) during 2016.

Local and host community procurement
  Local (in country) procurement   Host community procurement
Region 2016   2015 2014 2013¹   2016 2015   2014 2013¹
Peru 89%   87% 88% 91%   8% 7%   5% 6%
Ghana 79%   64% 72% 68%   7% 9%   6% 6%
Australia1 99%   97% 99% 99%   71% 66%   69% 72%
South Deep 100%   100% 100% 100%   14% 10%   9% 4%
Group 92%   85% 91% 86%   38% 35%   39% 31%
1 Excludes Yilgarn assets.

In 2017, we plan to pilot a social and economic impact assessment and evaluation of our social investments at South Deep and develop an approach that will be rolled out to the other regions.

Our performance for 2016 in relation to Gold Fields’ Society and Community Charter for our mines in Peru, Ghana and South Africa is outlined in the infographics on p102 – 107.

Community Stakeholder Relations in Australia

Relations in Australia The remote location of our mines in Australia – as well as strong local socio-economic conditions – mean that stakeholder engagement, which is driven by a current stakeholder engagement plan, is largely focused on local indigenous groups. This includes engagement around native titles on Gold Fields’ licence areas, land access for near-mine drilling and the preservation of indigenous heritage.

Total SED spend by the Australia region was A$453,000 (US$340,000) in 2016 compared with A$444,000 (US$320,000) in 2015, the majority of it dedicated to health and wellbeing (40%) and skills development (39%). Of the SED spend the Gold Fields Australia Foundation is responsible for investments in community projects. During 2016, the foundation invested A$189,000 (US$142,000) in a number of initiatives to support indigenous groups, including bursaries to children from these communities and developing a database to detect rare diseases among community members. A third project seeks to improve eye care in remote communities. During 2015 the Foundation invested A$63,000 (US$45,000).

We are committed to working to obtain the consent of indigenous peoples for new projects (and changes to existing projects) – where they are located on lands traditionally owned by or under customary use of indigenous peoples – and that are likely to have significant adverse impacts on indigenous peoples.

Tenements at Gold Fields’ newly acquired Gruyere project are subject to the native title rights of the local indigenous population. Gold Road Resources, with whom Gold Fields entered into the Gruyere JV, concluded a native title agreement with the registered claim group, the Yilka, in early 2016. This agreement has been assigned to Gold Fields. We are also engaging with other indigenous groups at the project.

A long running legal dispute around a native title claim made by the Ngadju People for the recognition of their Native Title rights over a large parcel of land, including tenements held by St Ives, concluded during 2016 in St Ives’ favour. The mine continues to engage with the Ngadju in relation to heritage surveys and other matters. Details of the legal case are in the Directors’ Report in the Annual Financial Report.

No formal complaints were received through the grievance mechanisms during 2016.

St Ives mine in Western AustraliaThe  
St Ives mine in Western Australia  

Human Rights

Gold Fields applies a formal human rights policy statement, both in dealing with its communities as well as its employees. The policy statement is aligned to the relevant ICMM Principles on Human Rights and the United Nations’ Protect, Respect and Remedy Framework.

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

Given the nature of Gold Fields’ footprint, activities and relationships, the human rights policy places specific emphasis on:

  • Community engagement
  • Indigenous rights
  • Resettlement
  • Security and human rights

Internally, we uphold the highest standards of human rights within our workforce, including freedom from child labour, compulsory labour and discrimination as well as the right to collective bargaining.

We carry out human rights due diligence on our own activities. Gold Fields’ business relies on multiple contractors and suppliers to carry out mining, development, construction and other forms of work on its operations. All contractors are included in Gold Fields’ own health and safety management systems, to help ensure that contractor employees benefit from safe and healthy working conditions.

All contractor employees wishing to report human rights violations are able to make use of Gold Fields’ confidential, third-party whistleblowing hotline. Where such complaints are made, Gold Fields will pursue the matter appropriately. Gold Fields does not currently carry out human rights due diligence on its suppliers. Nonetheless, the Group has developed an external 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 human rights and related violations and/or transgressions.

Gold Fields’ protection services team works 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.

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). This has led to the standard being applied at all relevant locations through full assurance audits. Although we withdrew our WGC membership in 2014, we have and will continue to apply both the Standard and guidelines.

South Deep  
Underground training at South Deep, South AfricaLicence  

Community relations in South Africa

CONTEXT

  • The South Deep mine is located near Westonaria on the West Rand of the Gauteng province. The West Rand is home to many gold mines, some of which have been operating for decades. After the 2016 local government elections Westonaria was merged with Randfontein to form the Rand West City municipality. Within the municipality there are 10 host communities that are impacted by South Deep, with a population of about 111,000 people (2011). Residents live in formal and informal settlements.
  • The area has high levels of poverty – formal unemployment is at 29.5% and youth unemployment at 39%, higher than the national average. Service delivery to these communities is poor and there is a history of social unrest against local government. While local government elections passed without significant incidents, animosity exists between various community organisations, loosely aligned to political parties.
  • Economic dependency on mining is high with a single employed individual in the sector supporting on average eight dependants.
  • All mining rights holders in South Africa (including South Deep) are required to submit an annual compliance assessment to government on progress made against meeting the annual targets in the Social and Labour Plan (SLP) component of the Mining Charter. A new draft Charter was released for comment in 2016 and consultation between the mining industry and government are ongoing.

BUILD RELATIONSHIP AND TRUST

  • In 2016, South Deep completed its community relations and stakeholder engagement strategy, finalised a three-year plan and commenced implementation
  • engagements are ongoing with various formal and informal meetings
  • In alliance with Sibanye Gold, Gold Fields constituted a Round Table with representatives from local government and communities to promote socioeconomic development in the host communities
  • 12 grievances of a social nature were received of which 11 were resolved and one is outstanding

CREATE AND SHARE VALUE

Community investment at South Deep is undertaken by the mine through its SLP as well as beyond-compliance socio-economic development efforts. These are undertaken directly by the mine, through the Gold Alliance – an alliance between Gold Fields and Sibanye Gold – and through the mine’s community trusts – the South Deep Education Trust, the South Deep Community Trusts and the Westonaria Community Trust.

Project 1 : Host community procurement

The South Deep Host Community Project vision is the greater of R500m or 25% of total procurement spend redirected to the host community in 2018 and 500 new jobs created by 2020. Host community procurement spend in 2016 was R356m. For details of the project see p99.

Benefit to the community:

Host community procurement not only creates jobs and services in our host communities, thus contributing in our efforts to promote our ‘social licence to operate’, but also improves the skills set of residents. This enables them to seek alternative employment or grow their enterprises.

Benefit to Gold Fields:

Host community procurement boosts the local supplier base to the mine, enabling us to seek out more competitive services with cost benefits for the operation.


Skills traing at South DeepProject 2 : Education and skills training

Since 2014, South Deep and its community trusts have been investing in a range of education and skills development projects in the host and labour sending communities. These projects range from early childhood development (ECD) to tertiary education and are mostly undertaken in partnership with government and other non-profit organisations. During 2016 the following investments were made:.

  • Full bursaries were awarded to 34 students to study at institutions of higher learning
  • Scholarships were awarded for 44 pupils to attend private schools
  • Additional maths and science tuition to learners and postmatric students
  • Classes to employees and community members to obtain or upgrade their Grade 12 certification
  • Partial payment of fees for pre-primary school learners
  • Payment of ECD teachers’ salaries and development of an ECD centre
  • Tuition, accommodation and transport fees for learners at TVET colleague

Benefit to the community

Apart from the obvious benefit derived by the individual students, the broader community benefits is that an increased proportion of their youth is likely to receive tertiary education and ultimately find employment.

Benefit to Gold Fields

The programme provides Gold Fields with a much-needed local skills pipeline of individuals with maths and science-related degrees.


Other material value sharing and creation projects:

  • An agriculture programme under the Gold Alliance started in 2016, involving the use of mine land to support community employment in agriculture. Three farms have been established in partnership with Servigraph and AfriGrow Development.
    Cost: R10m (US$680,000) (2016)
    Impact:

    – Reduce unemployment, especially among youth in host communities. Currently about 58 community members work on the farm
    – Diversity the local economy from mining to agriculture
    – Enable the productive use of disused mine land
  • Thusanang Clinic, an eight-roomed prefabricated structure was constructed and equipped in Thusanang in partnership with the provincial Department of Health, the local municipality and the Thusanang Development Trust.
    Cost: R1.5m (US$102,000) (2016)
    Impact:

    – Residents of Thusanang have access to healthcare
    – During construction, 16 temporary jobs for host community residents and three SMMEs were empowered by contracts for construction services
    – Nine permanent jobs for people living in Thusanang

THE SOUTH DEEP COMMUNITY TRUSTS

THE SOUTH DEEP COMMUNITY TRUSTS

MANAGE RISKS AND IMPACTS

Project 1 : Thusanang informal settlement

Risk:

The informal settlement of Thusanang is situated directly on the border of the mine and is expanding rapidly with around 3,500 households (2011) living there (1998: estimated 121 households) – this poses risks to the mine and the residents.

Action

  • Frequent and ongoing community engagements
  • Establishment of a landowners committee to jointly manage settlement growth
  • Construction of the Thusanang Clinic, support to the library and other facilities

Spend to date: R1.56m (US$106,000) (Since 2015)


Thusanang
The Thusanang community lives adjacent to the South Deep mine  


Project 2 : Westonaria Organisation Workshop (WOW)

Risk:

A review of the enterprises created during the WOW, a project of the Gold Alliance, was conducted during 2016, indicating that many of the enterprises were not able to sustain the 200 jobs that were originally created. Efforts are being focused on sustaining jobs mainly through the agricultural programme.

Spend to date: R1.25m (US$85,000) (Since 2015)



MEASURE ACTIONS / IMPACTS

SED spend in South Africa
2013 – 2016

 

South Africa SED contributions
by type

(US$m)   (%)
SED spend in South Africa   South Africa SED contributions

Other actions:

  • An independent mine-community relationship assessment using the ICMM tool was piloted in the Thusanang, Bekkersdal and Simunye communities. The findings indicate improvement in relationships from the 2014/2015 assessments. The assessment will be undertaken in the remaining host communities during 2017 and actions implemented to further address deficiencies.
  • An independent socio-economic impact assessment, assessing the mine’s impact on neighbouring communities, has been commissioned. This assessment will seek to measure the change in a range of economic and quality of life indicators in Westonaria since 2011. In addition it will seek to gauge the impact of South Deep’s various community investment programmes and projects..

 

Community relations in Ghana

CONTEXT

  • In 2016, Ghana held peaceful general elections that saw the New Patriotic Party move from main opposition to become the ruling party. This is unlikely to impact Gold Fields’ operations, especially from a fiscal perspective, following the signing of the Development Agreement with the Ghana government in 2016.
  • Tarkwa and Damang mines are located in the Western Region along with a few other large-scale gold mines. Mine-community tensions exist in mining areas, the worst example of which was when illegal miners (galamsey operators) invaded AngloGold Ashanti’s Obuasi concession in 2015 and 2016.
  • Tarkwa is hosted by the Tarkwa town and eight host communities with approximately 50,000 inhabitants. Damang has nine primary host communities, which are home to about 15,00 people. Traditionally, these communities are under jurisdiction of the Wassa Fiase Traditional Council. Politically, Tarkwa is within the Tarkwa/Nsuaem Metropolis (local authority), while Damang is in the Prestea/Huni-Valley District (local authority).
  • Both Tarkwa and Damang are peri-urban communities, with access to electricity, health facilities, and other social infrastructure, with Tarkwa being the more developed of the two. Many of the youth in Damang are engaged in agriculture, or work for the mine, either directly or through contractors. A significant number are also engaged in artisanal mining or in the informal sector.

BUILD RELATIONSHIP AND TRUST

  • In 2016, the action plan to address gaps in the 2015 mine-community relationship assessment, was implemented. A community employment committee at each mine was established to promote host community employment and transparency.
  • Formal and informal community and government engagements are ongoing regarding community development. Mine community consultative committee meetings are held quarterly.
  • Gold Fields has worked with an independent consultant to prepare its community relations and stakeholder engagement strategy and three-year implementation plan.
  • 64 grievances of an environmental, social and human rights nature were received by both mines through their formal grievance mechanism – 60 resolved, four outstanding.

CREATE AND SHARE VALUE


Thusanang

Project 1: Road rehabilitation

Gold Fields Ghana, in partnership with the government of Ghana is upgrading the 29km road between Tarkwa and Damang and paving the road surface in bitumen. The total cost of this project is estimated at US$17m over two years.

During 2016 the following progress was made:

  • A cooperation agreement was signed between Gold Fields and Ghana Highways Authority
  • Contracts were awarded to three contractors for rehabilitation work to be carried out simultaneously and construction commenced
  • Contractors are prioritising local employment as part of their recruitment policy.
  • A socio-economic baseline assessment was undertaken

Benefit to the community:

During construction of the road, job opportunities will primarily go to members of our impacted communities. The improved road infrastructure will benefit all public road users as travel times, vehicular accidents and vehicle maintenance costs will be reduced. Roadside communities will no longer experience dust emissions since the road will be surfaced.

Benefit to Gold Fields:

Gold Fields will save on the cost of transport as the maintenance of vehicles transporting labour, goods and materials will be reduced. Road maintenance costs will also be reduced. The improved infrastructure will also reduce employees’ travel time by 35 minutes per journey, could limit driver fatigue and will enable emergency services to operate more efficiently.


Project 2: Youth employment in agriculture

The multi-year Youth in Horticulture Production (YouHop) programme, aimed at generating employment and improving incomes for the youth in host communities, was started in 2016. YouHop is a partnership between the German Development Cooperation (GIZ) and the Gold Fields Ghana Foundation. The Youth in Organic Horticulture Programme (YouHop) is targeting 1,000 community youth, along the entire horticulture value chain – from training, to ICT systems, financing and green label certification. YouHop seeks to be self-funding after three years, when the partners exit.

Impact:

  • Reduce youth unemployment in Tarkwa and Damang mines’ host communities and reduce dependency on the mines
  • Improve agricultural production in the area
  • Improve incomes of community youth

Cost:The two organisations are investing a combined €800,000 (US$850,000) over a three-year period.


Other material value sharing and creation projects:

  • Construction of a laboratory at the University of Mines and Technology in Tarkwa.
    Impact:
    – Improved academic education
    – A quality pipeline of future mine employees
    Cost: R10m (US$680,000) (2016)
  • Scholarships and bursaries for tuition and residence for qualifying pupils and students in the mines host communities.
    Impact:
    – Residents of Thusanang have access to healthcare
    – During construction, 16 temporary jobs for host community residents and three SMMEs were empowered by contracts for construction services
    – Nine permanent jobs for people living in Thusanang
    Cost: R1.5m (US$102,000) (2016)
  • Numerous health, santitation and water supply, road infrastructure projects were implemented through the GFG Foundation.

MANAGE RISK AND IMPACT


Project 1 : Damang - Resettlement and compensation

Risk:

Possible loss of livelihoods of 88 farmers affected by the expansion of Damang mine’s Amoanda waste dump, affecting our social licence and reputation

Action

  • Resettlement Action Plan preparation informed by farm surveys and enumeration of structures
  • Reconstitution of Crop Rate Compensation Committee and crop rate review and agreement
  • Review of crop compensation procedure and processes
  • Development of grievance procedure
  • Agreements with 81 migrant farmers to receive cash compensation and seven farmers who will be resettled

 
CommunityCommunity meeting near the Damang mine  


Project 2: Kottreverchy waste dump compensation

Risk:

Failure to resolve the dispute between aggrieved farmers and Gold Fields on the Kottreverchy waste dump compensation issue that has been pending since 2013, could result in a delay in constructing essential tailing dams at Tarkwa. Legal action could also result

Action

The Environmental Protection Agency is mediating the dispute based on the findings of an independent re-evaluation of the farms and structures

Spend to date: US$181,000


Project 3: Blasting impact on Tarkwa Brahabobom community

Risk:

Damage to houses because of blasting and resultant ground vibrations – financial and reputational impact.

  • Building and structural survey by independent consultant
  • Creation of buffer zone between community and mining area
  • Development of rubber tree plantation along the buffer zone, using community labour
  • Repair of cracks to the 154 houses located outside the 500m blast zone
  • Blast monitoring activities by the joint Gold Fields – community blast monitoring team
  • Continuous engagement with relevant stakeholders (local government, regulators, community members, etc.)

Spend to date: US$271,000


MEASURE ACTIONS / IMPACTS

SED spend in West Africa
2013 – 2016

(US$m)

 

West Africa SED contributions
by type

(%)
SED spend in South Africa 2013 – 2016   South Africa SED contributions by type

 

Other actions:

  • Independent baseline studies for the Damang-Tarkwa road project, against which the impacts and benefits of the road can be measured after completion.

 

Community relations in Peru

CONTEXT

  • In 2016, community protests, particularly with regard to environmental impacts, saw the continued stoppages of certain mining projects in Cajamarca province, and the declaration of an environmental emergency in Hualgayoc.
  • Nationally, the country held elections with the now president winning by a narrow margin. The opposition holds the majority in the Peruvian congress though. This has not impacted Gold Fields’ operations.
  • Cajamarca has rich deposits of copper and gold. However, currently in this locality there are four mining projects postponed over environmental or community concerns, strikes and anti-mining protests.
  • Cajamarca is the only region with more than 50% of its population living in poverty. Since 2013, it is the poorest region due to its strong recession, lowered production in the mining sector and projects that have closed. In Cajamarca 89% of the employed population works in the informal sector, while only 11% are formal workers.
  • Cerro Corona’s direct area of influence includes the urban centre of Hualgayoc, as well as the rural villages of El Tingo, Coymolache Alto, Coymolache Bajo, Cuadratura and Pilancones, where about 6,000 people live (2011).

BUILD RELATIONSHIP AND TRUST

  • During 2016 the Cerro Corona mine updated its community relations and engagement strategy and developed a multi- year implementation plan
  • Its ongoing engagement with local authorities and community organisations includes formal monthly meetings with local government and community leaders
  • Involvement in community events and festivities is active and ongoing
  • Participation in developing a Peruvian Mining Vision 2030 with the UNDP Development Programme, mining peers and University of Queensland
  • If grievances of social and environmental nature were received through formal grievance mechanisms - resolved is pending

CREATE AND SHARE VALUE


water basin  provided to Cerro Corona communities

Project 1: Water and environment

This is a four-year programme started in 2014 to improve water quality and access to communities of Hualgayoc in Cerro Corona direct area of influence and to promote, in partnership with government, remediation of legacy mining activities (not associated with Gold Fields). The programme involves building and maintaining potable water systems and remediation of environmental liabilities that are contaminating a local stream. During 2016 a number of community-based water systems were completed benefiting 307 households.

Total cost:: US$1,5m (since 2015)

Benefit to the community:

Close to 90% of households in Hualgayoc now have access to sufficient clean running water. Apart from strengthening relationships between Gold Fields, the regulator and our host communities, the remediation of legacy mining sites near Cerro Corona will significantly improve the quality of the water in the El Tingo River.

Benefit to Gold Fields:

Strengthens our social licence to operate in a region in which other mining companies have experienced water-related conflict with local communities. It also reduces the cost of trucking our water to the community.


Project 2: Development of local suppliers

A three-year project, in partnership with SwissContact, to build the competitiveness of local suppliers was concluded in 2016. The main achievements of the project are:

  • 64 local suppliers underwent a diagnosis followed by an action plan to improve their competitiveness
  • 52 local suppliers started their improvement action plan with an average progress of 70%.
  • 20 local suppliers obtained a new contract with a company/client different from Gold Fields.
  • A local supplier’s management system.
  • Supplier competiveness has increased from 10% to 40% since 2014.

The implementation of a second phase will start in 2017.

Total cost:: US$450,000 (since 2014)

Benefit to the community:

Individual local suppliers will derive long-term benefit from targeted plans to help them improve their competitiveness and diversify their customers while the broader community will experience economic upliftment and employment opportunities.

Benefit to Gold Fields:

Gold Fields will be able to obtain a better service at more competitive prices from local suppliers.


Other material value sharing and creation projects:

  • A four-year child nutrition project in Hualgayoc, started in 2014, has had 802 children from 28 hamlets participating. Partnership with Caritas del Peru.
    Cost: US$816,000 (since 2014)
    Impact:

    – Anaemia diminished from 58% in 2014 to 31% in 2016
    – Malnutrition diminished from 45% in 2015 to 36% in 2016
  • Improvement of dairy farming of small farmers in the district through pasture fertilisation and veterinarian support.
    Cost: US$312,000
    Impact:

    – 200 ha of pastures have been planted
    – 420 cows inseminated – calve number improved by 55%
    – 1,200 cattle treated

MANAGE RISK AND IMPACT

Project 1: Houses at risk of collapse

Risk:

Possible social protests set off by the collapse of houses due to structural damage in Hualgayoc City that could injure or kill any villager, affecting our social licence and reputation.

Action:

  • Multisectorial committee established to address issue
  • First assessment identified 9 houses in high risk of collapse – all houses rebuilt
  • Second assessment of houses in high risk finished (28 houses identified)

Spend to date:: US$950,000 (since 2014)


A damaged house in Hualgayoc city before and after rebuilding licence    A damaged house in Hualgayoc city before and after rebuilding licence2
A damaged house in Hualgayoc City before and after rebuilding


Project 2: Restrictions to the raising of the Cerro Corona tailings dam above the Las Tomas Spring level

Risk:

Protests by the Manuel Vasquez Association (MVA), a community organisation.

Action:

  • Raising of the spring in line with legal and regulatory permits
  • Expansion of the 12km MVA pipeline system to nearby communities, benefiting 1,500 households in 18 hamlets
  • Earlier agreement with the MVA to raise the tailings dam was addressed. Further engagement with the MVA to execute this agreement

Spend to date:: US$4m (since 2015)


Cerro Corona tailings storage facility
Cerro Corona tailings storage facility

Project 3: Exploration agreements with communities

Risk:

Without consent from local communities no exploration activity – essential to ensure life extension of Cerro Corona – can take place.

Action:

  • Extensive stakeholder engagement activities with affected communities
  • Early-stage community investment programmes in affected communities
  • Initial exploration agreements with three communities: Cuadratura, La Tahona Baja and Trance de Pujupe
  • Spend to date: US$127,000 (2016)


MEASURE ACTIONS / IMPACTS

SED spend in Peru
2013 – 2016

(US$m)

 

Peru SED contributions
by type

(%)
SED spend in Peru   Peru SED contributions

Other actions:

  • Following implementation of a communication and institutional relations plan to address the findings of the 2014 mine-community relationship assessment, a new independent relationship assessment was carried out. 45% of the interviewed direct influence area people have a good perception of Gold Fields. 33% have a negative perception.
  • Guided visits programme to Cerro Corona reached 72% of the youth in our direct influence area, helping to improve perceptions of mining.