Sustainable
development
Sustainable
development management
Kumba faces a challenge common to all mining companies: how to exploit a (finite) resource, maximise returns to shareholders, contribute to improved socio-economic conditions, and minimise environmental degradation. As a group we will continue to mine iron ore responsibly – provide a safe working environment, train and develop our employees and contractors minimise our environmental impact, act with accountability to ensure that our natural resources are used efficiently, and maximise our potential to contribute socially and economically.
This section maps out our progress in consolidating the management of sustainable development at Kumba.
It overlaps with governance and describes where we are and where we want to be. We know we are a new company, albeit one with a long history, and acknowledge that we are forging a new culture and a new way of doing business with the intention of creating a mining company with a realistic and honest approach to managing non-financial problems, building a conducive working environment and engaging with stakeholders.
Our focus areas, presented below, are suitably aligned with the resources needed for implementation in terms of Kumba structures, skills, accountability and management responsibility.
Sustainable development focus areas
| Safety, health, and environment (SHE) |
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• Zero harm workplace
• Occupational health diseases
• Sustainable use of water and energy
• Waste reduction
• Reduced environmental footprint
• Risk management |
| HIV/Aids |
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• Voluntary counselling and testing (VCT), antiretroviral treatment (ART) and wellnessprogrammes among the workforce
• Awareness programmes in neighbouring communities |
| Society and transformation |
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• Social and labour plans
• Local economic development
• Corporate social investment |
| Stakeholder relations |
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• Stakeholder analysis
• Stakeholder engagement |
| Human capital |
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• Employment equity
• Human resource development
• Human rights |
| Material stewardship |
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• Responsible procurement
• Contractor behaviour
• Product responsibility |
| Corporate governance |
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• Policies
• Historically disadvantaged South Africans (HDSA) ownership
• External reporting |
In developing our safety and sustainable development strategy, we are guided by a clear understanding of what we want to achieve and how we will do so.
Primary drivers include:
- Our commitment to sustainability
- The recognition that the ‘business at all costs’ principle doesn’t work
- South Africa’s transformation and requirement to include all • South Africans in the economy
- The value of our reputation.
We are therefore committed to the highest management and performance standards that deliver value for all stakeholders.
We aim to leave behind a legacy that will continue to benefit
the communities in our operational and labour-sending areas.
Framework
Kumba’s management approach is based on a draft sustainable development framework. We have adopted a simple approach to this framework:
- Vision – as part of our commitment, during 2008 we will develop a common understanding of sustainable development across Kumba to establish a shared vision for the company.
- We have guiding principles for sustainable development to direct our thinking and actions (below) and emphasise our support and commitment to the triple bottom-line and corporate governance.
- We have developed policies governing SHE and local economic development. We are integrating these into a single comprehensive sustainable development policy.
- The final level of sustainable development management is procedures and management systems. These are generally in operation as implemented at operational level.
Guiding principles for sustainable development
- We acknowledge that our corporate governance is driven by the principles of fairness, accountability, responsibility and
transparency which are applied in our approach to all three pillars of sustainable development.
- A zero-harm philosophy guides our policies, procedures and actions.
- Our business is conducted ethically and in a sustainable manner.
- All our corporate social responsibility (CSR) programmes are integrated into our business strategies, reporting structures and
performance management systems.
- We acknowledge that different stakeholders have different needs and that Kumba will, through its stakeholder engagement
processes, strive to understand and address the reasonable expectations and interests of stakeholders.
- We understand the importance of building effective partnerships with our key stakeholders, especially those on whom we have a
direct and significant impact.
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Management
Responsibility for managing sustainable development at Kumba is shown below.
| Long-term vision
and goals, policies |
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– |
| Controls/procedures |
– |
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| Strategic guidelines
and standards |
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– |
– |
| Setting targets
and objectives |
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– |
| Strategy implementation |
– |
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| Assurance and monitoring |
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– |
| Reporting |
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| Advisory, consultation |
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– |
– |
| Engagement |
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| Benchmarking |
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– |
– |
The functions of the key committees responsible for sustainable development are shown below:
Safety and sustainable development committee
of the board |
The committee assures the board that matters related to sustainable development, including safety, health and the environment, are effectively implemented, managed and risks mitigated. It also guides the development of applicable frameworks, policies and guidelines and ensures their progressive implementation throughout the group. The committee meets four times a year. |
Transformation
committee |
Sub-committee of the executive committee which deals with day-to-day management of transformation issues and covers black economic empowerment, employment equity, preferential procurement, HDSA ownership, skills development, women in mining, corporate social investment (CSI), local economic development, social andlabour plans, mining rights conversions and new rights applications. The committee meets monthly. |
SHE steering
committee |
Sub-committee of the executive committee which deals with day-to-day management of workplace occupational health and safety and the environment. The committee meets monthly. |
Risk management
Kumba’s integrated risk management system is outlined on page 100. Risks without a monetary value are also considered in the risk identification, management and mitigation process. These risks are referred to as ‘enablers’ because ignoring them would prevent progress; removing them would enable progress. Reputation risk is a typical example of an enabler, as is the ‘social licence to operate’ – the permission that society gives.
Key impacts, whether social or environmental, are identified in the different processes, for example, impact assessments, environmental management plans, and social and labour plans. Impacts are assessed through the risk assessment process and through ongoing operational risk assessments. Monitoring key indicators provides information on our impact on society and the environment. Risks are assessed monthly through board and executive committee meetings.
Key non-financial risks
| Employee safety |
Work-related injuries and fatalities due to project construction and expansion at Sishen Mine |
Improved safety awareness through campaigns, visible leadership, empowerment of people and implementation of safety standards. |
| Regulatory |
Non-compliance with
mining charter regulations |
Ensure conversion of all Kumba mineral rights and fully compliance with mining charter requirements by 2008. |
| Employment equity |
Not being able to recruit and
retain HDSA management |
Detailed plan in place to ensure target of 40% reached by end 2008. |
| Employees |
Skills shortage |
Ensure incentives and remuneration are market related and opportunities presented for employee development. |
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Housing shortage |
Revised strategy to ensure attraction and retention of staff. |
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High turnover of artisans |
Artisan retention allowance provided and market-related remuneration implemented. |
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HIV/Aids |
VCT programme conducted annually. ART and immune boosters supplied to infected employees. Designated service providers aligned to company strategy. Community HIV centre established to provide support to contractors, families and community. |
| Social |
Dingleton community located
in area to be mined. |
Address safety issues and community concerns. Relocate community if feasible. |
Impact of
mine closure |
Job loss, environmental degradation |
An additional long-term risk concerns closure of both Thabazimbi and Sishen mines. Mitigating these risks forms part of a detailed and intensive closure-planning process. |
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