CSR IN THE “HEAVY FOOTPRINT”MINING INDUSTRY

Gerard H. BrimoPresident & CEO

MINING = CONTROVERSIALMINING = CONTROVERSIAL• EXTRACTIVE: Non-Renewable Resource– i.e. not “sustainable”• ENVIRONMENTAL CONCERNS• SOCIAL CONCERNS• “NATIONALISTIC” CONCERNS– Multinationals; sharing of benefits• LEGACY ISSUES– Un-rehabilitated mines of the past• CONFUSION– Large-Scale vs. Small-Scale/Illegal Mining

THE RESULTGenerally a hostile operating 

environment

And yet the world as we know it today can’t survive without minerals….

It is estimated that every newborn will need:

NICKEL and its Uses

Nine of the worldNine of the world’’s largest mining s largest mining companiescompanies

World Business Council for World Business Council for Sustainable DevelopmentSustainable Development

TwoTwo--year (2000year (2000––2002) independent 2002) independent process of research and consultation process of research and consultation ––

Mining, Minerals and Sustainable Mining, Minerals and Sustainable Development ProjectDevelopment Project

International Institute for Environment International Institute for Environment and Development (IIED)and Development (IIED)

CSR IN THE CONTEXT OF MININGCSR IN THE CONTEXT OF MINING

"A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.”*

** European European CommissionCommission’’s s definition of definition of CSRCSR

STRONG LEGAL FRAMEWORK IN THE PHILIPPINES

• Social Acceptability:– Endorsement of Local Gov’t Units (2 out of 3 required)– Endorsement of Host Communities to the Social Development & Management Plan (SDMP)

– “Free & Prior Informed Consent” from Indigenous People, if any (supervised by National Commission for Indigenous People)

• Mandated Social Expenditures:– 1% of mining & milling costs yearly (revised to 1.5% of operating costs) through the SDMP; yearly SDMP report 

– 1% of gross revenues (royalty) to Indigenous Peoples if FPIC satisfactorily completed, among other benefits (negotiated)

Highlights

• Environmental Studies/Reports

– Environmental Impact Statement (EIS)(required for issuance of ECC)

– Environmental Compliance Certificate(required for all environmental, social and other permits)

– Environmental Protection & Enhancement Program (EPEP), includes Final Rehabilitation/ Decommissioning Plan             (final environmental requirement for mine development, operation and closure)

– Annual EPEP – accomplishment for the year and environmental program + budget for following year

STRONG LEGAL FRAMEWORK IN THE PHILIPPINES Highlights

• Mandated Environmental Expenses 

– 3% to 5% of mining and milling costs annually

• Monitoring

– Quarterly Monitoring by Multi‐Partite Monitoring Team composed of Mines & Geosciences Bureau, Environmental Management Bureau, representative of host community, representative of Indigenous Cultural Community (if any) and accredited environmental NGO

• Mandated Mine Personnel:

– Mine Environmental Protection & Enhancement Officer

– Community Relations Officer

– Safety Officer

STRONG LEGAL FRAMEWORK IN THE PHILIPPINES Highlights

PRINCIPLES OF SUSTAINABILE DEVELOPMENT

• Environmental Responsibilities:

– Minimize environmental impacts during the planning stage

– Ensure adequate environmental protection measures during the operations stage

– Restore, if not improve, the environment post‐mining

– In all instances, use Best Practices

A practical approach in relation to mining:

Low grade lateritic

nickel ore (limonite)

Low grade lateritic

nickel ore (limonite)

440m

900m

423m

If Coral Reef Was Not Avoided

Causeway 680 mCost = Php 23.4M

Trestle 440 mCost = Php 57.4M 

Total Cost Php 80.8M

Existing :Coral Reef Protected

Causeway

424 mCost = Php 14.6M

Trestle 900 mCost = Php 117.5M 

Total Cost

Php 132.1M

Additional Cost to Company

Php 51.3M

CAUSEWAY

TRESTLE

680m

CORAL REE

FS

Coral Bay Nickel Processing Plant – Protection of Coral Reefs in the design of causeway/trestle

Coral Bay: Coastal Coral Bay: Coastal Resource ManagementResource ManagementFindings: A healthy marine ecosystem was 

maintained at the primary impact zone of CBNC’s coastal  operations.

Regular patrol prevented illegal fishing practices and kept the area as a de‐facto sanctuary.

Trestle pile with soft corals

Trestle area teeming with fishes

Coral Bay – Coastal Resource Management

Rio Tuba Nickel: Retention Ponds

Rio Tuba Nickel: Dust Emission Controls

MINE ROAD WATER SPRAYING WIND BREAKERLIMESTONE QUARRY WATER SPRAYING CONTRACTED BY COMM. RESIDENTS 

TRUCK TIRE WASHER ACCORDION  CHUTE ROAD SWEEPERS

How do you rehabilitate this?

Rio Tuba Nickel: Mining Operations

Rio Tuba Nickel: Progressive Rehabilitation of MinedRio Tuba Nickel: Progressive Rehabilitation of Mined--out Areasout Areas

Rehabilitated Area

Topsoil

RTN Nursery

Mined-out area scheduled for rehabilitation

Top soil stockpile

Rio Tuba Nickel: Progressive Rehabilitation of MinedRio Tuba Nickel: Progressive Rehabilitation of Mined--out Areasout Areas

May 2008May 2008

Sept 2009Sept 2009

March 2011March 2011

Rio Tuba Nickel

Rio Tuba Nickel: Inside Rehabilitated Mined-out Area

Taganito Mining: Mine Rehabilitation

PHILEX MINING CORP. - REHABILITATION OF TD NO. 1

BeforeBeforeBefore

TodayTodayToday

Forest Protection and Watershed ManagementPHILEX MINING CORP.

DENUDED AREA ABOVE BANGET MILL DURING 1960DENUDED AREA ABOVE BANGET MILL DURING 1960’’S S 

DURING 1980DURING 1980’’S S  THE PRESENT DAY SITETHE PRESENT DAY SITE

Principles of Sustainable Development…

• Social Responsibilities:‐ Uplift the standard of living of the host communities in a manner that enables them to sustain themselves post‐mining.

Therefore, prioritize social expenditures on:• Health and Education

• Infrastructure Projects

• Livelihood Programs/ Business Development

‐ Utmost respect for Indigenous People’s rights and culture

SOCIAL DEVELOPMENT MANAGEMENT PROGRAMNS (SDMP) 

“BEYOND COMPLIANCE”

Disbursed throughoutImpact Area

* SDMP Commitment of Php 5.2 Million and 1% Royalty to IPs of Php 34.0 Million

2010 Commitment: Php 39.2 Million*2010 Actual: Php 62.2 Million

2010 Commitment: Php 68.6 Million2010 Actual: Php 104.6 Million

HOSPITAL

Status :  Primary Hospital

Workforce : 38 StaffsDoctors : 09Nurses : 14Other Staff : 15

Total Cost (2010) : Php 60.5 MillionCredited to SDMP : Php 39.4 Million 65% of patients are non‐dependents.

SCHOOLS

Status : Private school, supervised by De La Salle University, Bacolod City

Workforce : 52 Staffsa. School Principal : 1b. Primary & Elementary Faculty :  25c. Secondary :            17d. Other Staff  : 9

Total Cost (2010): Php 27 MillionCredited to SDMP: Php 17 Million 63% of students are non‐dependents.

INFRASTRUCTURE PROJECTS

LIVELIHOOD PROJECTS

SOCIAL SERVICES

EDUCATIONAL ASSISTANCE

SDMP scholars during a team building seminar. 77 graduated.

Some of the 7 school buildings, 14 classrooms constructed.

HOUSING FOR INDIGENOUS PEOPLES

No. of Housing Units Built: 208 Units@6 Sites

Total Cost (2010): Php 13M

IP Housing (Gawad Kalinga)

Typical Palaw’an Home

INDIGENOUS LEARNING SYSTEM (ILS)

• Concept       :    Arnold Jansen Catholic  Mission Foundation

• Implementor:   St. Jude’s Parish, SVD Order

• Levels:    Level 1:  Non‐literateLevel 2:  Elementary undergraduate

Level 3:  Secondary undergraduate

• Work force:  14 staff

0 100 200 300

06‐07

07‐08

08‐09

09‐10

Level 3

Level 2

Level 1

No. of sites

Enrolment Profile  (06‐09)667 Students Enrolled

Total Cost (2010): Php 10.3 Million

CORPORATE CULTURECORPORATE CULTUREMust start at the top!Must start at the top!

VISION STATEMENT

To be a world‐class diversified mineral resource company that has exemplary relationships with all its stakeholders.   

i.e. using Best Practicesi.e.i.e. using using Best PracticesBest Practices

i.e. we will get along well with everyone we deal with, by doing the right things all the time

i.e. i.e. we will get along we will get along well with everyone we deal well with everyone we deal with, by doing the with, by doing the right right thingsthings all the timeall the time

Corporate Culture...

• Optimizing our current operations;• Exploring and developing additional deposits for 

nickel and other minerals to sustain our growth;• Delivering to our customers quality mineral 

products in a timely manner;

• Uplifting the quality of life of our host communities;

• Protecting the environment in all our operations;• Nurturing our employees and providing a safe and 

healthy workplace for them to achieve their full potential; and

• Adopting the highest standards of corporate governance

BusinessImperatives

Social Imperatives

Both

MISSION STATEMENTUsing best global industry practices, we are committed to:

Corporate Culture...

• Vision/Mission/Core Values cascaded down to each mining operation

• Seminars to mine managers and supervisors – what do these statements of principles mean and how do we accomplish

• Integration into Performance Appraisal Reports

• Strong Environmental and Community Relations offices at each mine site

A CSR INDUSTRY‐WIDE INITIATIVE: TRANSPARENCY 

HEAVY FOOTPRINT INDUSTRIES+ GOOD CSR PRACTICES= GREAT DEVELOPMENT OPPORTUNITIES

WHILE CARING FOR THE ENVIRONMENT….

THANK YOU!