Mining and Sustainable Development II - DTIE

Mining
address these issues where governments do not.
Disagreements over how to mobilize this capacity
have intensified in the press, in the halls of government,
in the business community, and in a
variety of international forums. Representatives
from business, government, and civil society are
searching for new approaches to better align corporate
governance with the economic, social, and
environmental realities of the 21st century.
“We need help from the private sector. Transnational
companies have been the first to benefit from globalization.
They must take their share of the
responsibility for coping with its effects.”
Kofi Annan,
Secretary General of the United Nations
The mining industry is not immune to these
pressures. While a mining company’s products are
not easily associated with the companies that produce
them, the public perception of the mining
industry is generally negative. In both the developed
and developing worlds, many people have
the perception that the mining industry is concerned
only with short term profits, collaborating
with unjust regimes, raping virgin territory of its
natural resources, destroying native customs and
biological diversity, abandoning social and physical
infrastructure in remote areas once an operation
is finished and leaving permanent scars in
once pristine landscapes . These perceptions cannot
be ignored if the mining industry is to thrive
in the 21 st century. These issues cause concern for
many mining companies. Hugh Morgan, the
CEO of WMC, referred to many of these issues
in an article entitled “Sustainable development is
an emerging part of our business strategy” available
at http://www.wmc.com:
“The worldwide minerals and metals sector is experiencing
momentous changes: commodity prices tumbling;
rapid currency movements; social and economic
upheavals in the developing world; and a vigorous
drive for greater public accountability and voluntary
public reporting. The first three issues have been
analysed extensively. The fourth has occurred virtually
undetected by financial markets – until a few
weeks ago. One of Australia’s most prestigious stockbrokers,
J B Were & Son, recently (9 June 1998)
issued a four-page mining research report on WMC,
of which 75 per cent was about our environmental
performance, specifically about our third annual
Environment Progress Report. The following is an
extract from the J B Were report; “The process of continuous
monitoring and reporting of environmental
progress is seen by J B Were as positive and necessary ...
In the future, resource companies that do not respond
to community standards and attitudes on environmental
issues will have their growth potential severely
limited.” The commentary from J B Were may not
be all that surprising to some, but coming from a
leading stockbroker, the J B Were report is, to the best
of my knowledge, a first. If there was ever any doubt
that financial markets viewed environmentalism as
a mainstream issue – by which I mean an issue that
has the capacity to directly affect shareholder value –
then J B Were has dispelled that doubt”
Collectively, the industry is working toward
improving its image as well as its operations on the
ground. The International Council on Metals and
the Environment (ICME), an association of metals
mining and smelting companies, has published
a report on the changing attitudes and practices of
member companies regarding community
responsibilities and ethical behaviour. In addition,
ICME has also recently added “community
responsibility principles” to its environmental
charter. 3
From words to action:
From this maze of pressures and often-conflicting
messages it is a formidable challenge for companies
to address serious social and environmental
issues on a day-to-day basis. Fortunately, one issue
does resonate loudly and clearly. Business managers,
investors, consumers, governments, and
others are all asking versions of the same question:
how do we obtain a clear picture of the human
and ecological impact of business, so that we can
make informed decisions about our investments,
purchases, and partnerships? Achieving such clarity
in measurement and reporting holds the
promise of delivering value both to business— by
providing a critical management tool—and to
external stakeholders—by providing timely, relevant,
and reliable information on the reporting
organization. 4
In increasing numbers, businesses around the
world are choosing to voluntarily publish environmental
reports – already numbering at least
2000 – detailing their management systems and
environmental performance. A recent study by
the Institute for Environmental Management and
KPMG found that over 35 of the world’s 250
largest companies are voluntarily publishing environmental
reports. Of these reports, a higher level
of reporting was noted in sectors with a perceived
large environmental impact such as mining, pharmaceuticals,
pulp and paper, chemicals & synthetics,
and transport (airlines, rail, shipping) 5 .
Recently, some leading companies have begun to
enlarge the purview of their reporting to encompass
social issues, indicating an incipient trend
toward broader, environmental–social–economic
sustainability reporting.
For example, an excerpt in the ‘Message to
Stakeholders’ of the 1999 Noranda Sustainability
Report reads as follows:
“In 1990, environment, safety and health were primarily
about regulatory compliance, pollution and
industrial hygiene. Increasingly, however, we are
being called to account not only for what we do but
also how we do it. Accordingly, we need to measure
the extent to which our operations enhance economic
development, ensure environmental protection
and promote social equity”.
A quick scan of the Internet demonstrates that
some of the leading mining companies have issued
some kind of environment report: BHP, Placer
Dome, Rio Tinto, RGC, Noranda, North, and
WMC have all published public environment
reports, and some have also published community
reports, safety reports and sustainable development
reports.
“Our 1999 Environment and Community Report
is part of our commitment to being open and
straightforward about our successes and failures. It
shows that, in a year of tough decisions and dramatic
change, we continued to pursue our commitment
to managing our activities in ways that integrate
environmental, social and economic objectives.”
Paul Anderson, Managing Director
and Chief Executive Officer, BHP
While these trends are encouraging, major
obstacles remain before such reporting can reach
its potential as a vehicle for higher standards of
corporate accountability and before such reports
can effectively be used to benchmark the performance
of companies and monitor their compliance
with external commitments.
One key obstacle is the absence of a generally
accepted reporting framework, which would
greatly enhance the credibility, comparability and
comprehensiveness of corporate sustainability
reports. In the same way that financial reporting
standards provide users with reliable and comparable
financial information a common framework
for sustainability reporting is essential to elevate
the practice to this level. Without such a framework,
stakeholders, and companies will have limited
ability to compare, benchmark, rate, and
utilize performance information.
To meet this need for a common reporting
framework, the United Nations Environment
Programme (UNEP) has joined forces with a
number of leading international organizations in
the Global Reporting Initiative (GRI). Since its
inception in 1997, the GRI has worked to design
and build acceptance of a common framework for
reporting on the linked aspects of sustainability—
the economic, the environmental, and the social.
Although in the long term the GRI Sustainability
Reporting Guidelines are intended for all types of
organizations, the GRI’s initial work has focused
on reporting by business organizations. The GRI
recognizes that reporting on the economic, environmental,
and social dimensions of organizationlevel
activity – let alone a fully integrated
sustainability assessment – is at the earliest stages
of a journey that will continue for many years. 6
The UNEP Division of Technology, Industry
and Economics has for many years worked to
stimulate individual companies – and industry
associations through their membership – to report
on their environmental performance and the
implementation of their voluntary commitments
in the form of codes of conduct and charters.
Since 1994, UNEP and the London-based SustainAbility
Ltd have produced ten reports on corporate
sustainability reporting through its joint
Engaging Stakeholders Programme. This programme
has developed a strong reputation among
a variety of stakeholders as a credible authority on
corporate reporting. This programme helps meet
the ever-increasing demand for corporate sustainability
report benchmarking, and the further
analysis of sustainability reporting at the sector-
UNEP Industry and Environment – Special issue 2000 ◆ 21