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Corporate Social Responsibility& Business Standards
Francis HoareGeneral Manager
Rio Tinto Diamonds NV
PanCanadienne ConferenceMontreal, Canada - May 2005
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Who is Rio Tinto?
• World leader in finding, mining and processing the earth’s mineral resources
• Turnover US$14.1 billion (US$750million in Diamonds)
• Earnings US$ 2.8 billion• Operating assets of US$16.6 billion• 33,000 employees worldwide• Main product groups
– Aluminium– Copper– Diamonds– Energy– Industrial Minerals– Iron Ore
2004 data
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Location of operations
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Rio Tinto Diamond Interests
? Current Productions? Owner of world’s largest mine - Argyle Diamonds, Australia
? Major owner & operator of Diavik Diamond Mines, Canada
? Murowa Diamonds, Zimbabwe
? Exploration? Australia
? Canada
? Africa
? India
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Rio Tinto Policies
• Communities• Employment• Environment • Human Rights• Land Access• Occupational Health• Political Involvement• Safety• Sustainable Development
Stated in Rio Tinto’s statement of business practice“The Way We Work”
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Business Case for Corporate Social Responsibility /1
IMPROVED LICENCE TO OPERATE
?Better relations with communities and governments
?Simpler regulatory dealings
?Better management of risks and liabilities-safety and health
-resource use
-emissions and waste disposal
Cont./…
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BETTER ACCESS TO RESOURCES
?Ability to meet criteria of lenders, insurers, investors
?Attractiveness for suppliers
?Attracting, retaining and motivating high quality staff
?Involvement in policy framing
?“Partner of Choice” for new opportunities
Cont./…
Business Case for Corporate Social Responsibility /2
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BETTER ACCESS TO MARKETS
?Preferred supplier to our customers
?Protecting markets and revenues through better understanding of stewardship issues
?Creating options by constructive engagement with customers, employees and other stakeholders
Business Case for Corporate Social Responsibility /3
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? Goal is to improve performance continuously and stay at forefront of international best practice
? Effective business standards do not add costs, they add value
? Influence the behaviour of our suppliers and customers – to aspire to similar standards
What does Rio Tinto hope to achieve?
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A Tiffany thought…
“We believe that for our customers there is an implicit presumption that we will have ensured the environmental and social integrity of the entire supply chain for our gems.
That is a part of the Tiffany promise.”
Mike Kowalski
CEO of Tiffany
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Challenges for the Indian industry
? Consolidation in the retail industry in US & Europe
? Need to differentiate from competition
? Build world class organisation to achieve product, financial & ethical superiority
? Transition from family owned businesses to corporate culture –need systems for effective and efficient management
? Effective monitoring of sub contractors - remote control management
? Customers expect standardisation of products and services
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™
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BEM Objectives
? Encourage industry to recognise and adopt quality standards
? Follow international protocols? Quality management
? Health and safety
? Social responsibility
? Environmental systems
? Reinforce customer confidence
? Improve efficiency
? Standardise production processes
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BEM Structure
? Voluntary Participation
? Work with KPMG Quality Registrar ? One of the top 3 international consultants
? Experienced quality auditors
? Approx 30 diamond and jewellery units certified
? Not just a box ticking exercise
? BEM guidelines based on existing international standards
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QualityQuality EnvironmentEnvironment Health & safetyHealth & safety Social responsibility
Social responsibility
Key Focus Areas
? Waste disposal
? Protection of
Natural resources
? Pollution Control
? Recycling
? Training and competency
? Use of personal
protective equipment
? Posture and work
area related issues
? First aid
? Evacuation plan
? Training and competency
? Hygiene and
housekeeping
? No Child labour
? Employee
facilities
? Response to employees concern
? Training and competency
? Customer focus
? Uniform grading
system
? Production/
Service planning
? Quality control
? Training and competency
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BEM Feedback 2005
Customer focus
Customer focus
OthersOthers
? Improved Hygiene and housekeeping
? Social responsiveness
? Employee Satisfaction
? Good public / community relationship
Cost controlCost control
? Continuous improvement
? Reduction in accident losses
? Reduced cost
EfficienciesEfficiencies
? Effective subcontractor monitoring
? Improvement in productivity
? Effective Waste disposal
? Enhanced Employee Development
? Customer Satisfaction
? Timely Delivery
? Quality Consistency
? Correlation between internal and international grading
? Traceability of country of origin
