Sustainability Governance and Management

Sustainable development is integral to the Group’s decision-making process and is part of our business strategy. Priorities are the safety and health of our employees, the development of local communities and environmental protection.

The Board of Antofagasta plc is responsible for the long-term success of the Group, overseeing strategic objectives, setting policies and goals, supervising economic, social and environmental performance and managing risk and internal controls. One of the five committees contributing to these functions is the Sustainability and Stakeholder Management Committee1.

THE BOARD 

The Board is made up of eleven directors, two of whom are female. None of the members holds an executive role in the company and five are independent directors. The Board delegates the implementation of strategy and financial objectives to Antofagasta plc’s Chief Executive Officer.

EXECUTIVE COMMITTEE

The Executive Committee of Antofagasta Minerals, led by its CEO, manages the mining division. This Committee focuses on matters such as the approval of capital expenditure for the operations and the Corporate Centre - within its designated authority - annual budgetary and planning programmes and the performance of the mining operations. It also promotes the exchange of best practice and the application of policies across all operations. The Committee is assisted by sub committees that review Operational Performance and Business Development, and by specific committees established to oversee key projects.

1 The other committees are: Audit and Risk, Nomination and Governance, Remuneration and Talent Management, and Projects.

The Board has ultimate responsibility for matters relating to sustainability. The Sustainability and Stakeholder Management Committee of four directors helps oversee these issues. It makes recommendations to ensure that ethical, safety and health, environmental, social and community factors feature in the Board’s decisions. The Committee guides the Board on sustainability matters by reviewing and updating the Group’s policy framework and strategies, including safety and health, environment, climate change, human rights, community and stakeholder relations. It oversees performance in these areas and ensures compliance with any commitments undertaken.

PRIORITIES FOR 2016

In 2016, the Committee met four times, with 100% attendance. Key matters for consideration included the review of the Group’s safety and health strategy, control of the agreements with the community at Los Pelambres, risk evaluation and environmental mitigations and a review of the sustainability issues in the Los Pelambres and Centinela projects. It also examined the operations’ communications strategy, community priorities and investments and compliance with the ICMM agreements. The Committee also reviewed and approved the 2015 Sustainability Report.

The Group has a Charter of Values –respect, safety and health, innovation, excellence, sustainability and forward thinking - that guides its decisions in all operations, projects and exploration. It also has an Ethics Code that stresses its commitment to doing business in a responsible and transparent manner.

The Group is a member of the International Council on Mining and Metals (ICMM), a worldwide organisation dedicated to promoting sustainable mining by improving standards and encouraging member companies to adopt and share socioenvironmental best practice.

Progress made in 2016 on commitments made by Antofagasta Minerals on joining the ICMM include:

  • Emergency Communications: a contingency plan was drawn up with the co-operation of the Caimanes community who live near the Mauro tailings dam.
  • Grievance management: the procedure for receiving and handling grievances was standardised across all operations, and will be managed centrally. The IT system supporting the procedure sends an alert when response times are not met.
  • Mine closure, biodiversity and climate change: new corporate standards were approved for these three issues.

Antofagasta plc has been included in the FTSE4Good, the London Stock Exchange sustainability index, since 2015. This index includes companies that demonstrate strong environmental, social and corporate governance (ESG) practices and have transparent management. Assessments are based on 300 indicators.

Antofagasta Minerals has set indicators for assessing its environmental and social performance.

Each mining operation has environmental and social goals based on its particular priorities. These indicators are included in the performance agreements for each operation and also in the individuals’ performance agreements.

Compliance with these goals is monitored in monthly operating performance reviews and the results are included in the monthly reports submitted to the Board.

In terms of welfare, progress was made during 2016 on the design of welfare indicators in the regions and in the assessment methodologies used for welfare projects, among others.

ASSESSING SUSTAINABLE PERFORMANCE

The Performance Agreement is a management tool for summarising Antofagasta Minerals’ annual focus and goals, allowing us to monitor performance and make any necessary adjustments. The 2016 Agreement highlights the importance of eradicating fatal accidents and consistently improving safety performance.

Issues directly related to sustainability (social, safety, organisational development and environment) accounted for 25% of the Performance Agreement in 2016.

The Group creates value for its stakeholders through the discovery, development and operation of mining assets. Antofagasta Minerals is committed to achieving safe and sustainable mining. We have developed a set of tools - best practices, standards and indicators - for incorporating these social and environmental controls into each stage of the mining cycle, within the framework set by the applicable laws and international standards.

The Group has developed a methodology for the timely and consistent identification of risks that may jeopardise the fulfillment of its objectives, establishing controls and responsibilities to prevent or mitigate such risks.

The Board has ultimate responsibility for assessing the nature and scope of significant risks for the Group, and for ensuring that appropriate internal control systems are in place. Strategic risks and the status of controls are regularly reported to the Board by the Audit and Risk Committee and, when appropriate, to the Committee for Sustainability and Stakeholder Management.

IDENTIFICATION, EVALUATION AND CONTROL

Risk identification is carried out annually by the executive teams of the Group’s operations. Risks are assessed according to their likelihood and potential impact. Preventive and/or mitigating controls are then outlined and assigned to the person responsible for their implementation.

The analysis and control of each risk is carried out through the corporate risk management system, which is constantly monitored by the corporate team.

In 2016, reviews and on-site verification of key risks were strengthened and control methods tightened. The results were presented to the Group’s Executive Committee.

SOCIO-ENVIRONMENTAL RISKS

Key sustainability risks are: fatal accidents or the failure to meet social and environmental commitments, mismanagement of mining waste, concentrate spillages and noncompliance with the operating standards at the Mauro dam.

In 2016, risks relating to noncompliance with the UK’s Modern Slavery Act1 were added to this list.

MANAGEMENT SYSTEMS

Los Pelambres, Zaldívar and Centinela Cathodes - are ISO 9001 certified. Los Pelambres and Zaldívar are also ISO 14001 and OHSAS 18001 certified.

 

Reporting

Annual Report 2016