Creating Value with the Future in Mind - Anglo American South Africa

Anglo American assessment of strategic, operational, project and sustainable development related risks
1. Identifying risks
A consistently applied
methodology is used to identify
key risks across the Group; at
business units, operations
and projects. This has been
effected through the
development, roll-out and
ongoing implementation of
a Group Integrated Risk
Management Standard.
2. Analysing risks and
controls to manage
identified risks
Once identified, the process
evaluates identified risks to
establish root causes, financial
and non-financial impacts
and likelihood of occurrence.
Consideration of risk treatments
is taken into account to
enable the creation of a
prioritised register.
3. Determining
management actions
required
Effectiveness and adequacy
of controls are assessed.
If additional controls are
required these are identified
and responsibilities assigned.
4. Reporting and monitoring
Management is responsible for
monitoring progress of actions
to treat key risks and is
supported through the Group’s
internal audit programme,
which evaluates the design
and effectiveness of controls.
The risk management process
is continuous; key risks are
reported to the Audit
Committee with sustainability
risk also being reported to the
S&SD Committee.
Our approach
Our material issues
The material issues we have
identified from our internal
and external processes in
2012 closely mirror those
identified and reported in 2011.
The principal change is that
the relative importance of
government and labour
relations has grown following
events in South Africa during
the year. Here, we outline the
seven themes that we use to
frame and report on our key
material issues.
Compliance, permitting
and licence to operate
Failure to meet the compliance
requirements of a changing and
increasingly demanding regulatory
environment, or to understand
the expectations of government,
poses a risk to all parts of our
business. Our social and legal
licences to operate stem largely
from our ability to demonstrate
compliance with permitting
requirements, responsible
environmental management and
the equitable distribution of the
economic value generated by
our operations.
For more information
see pages 24–67
Community development
The legitimacy of the mining
industry, particularly in developing
countries, depends on its ability to
contribute to the well-being and
prosperity of host communities.
Our development solutions must
make a positive impact and endure
beyond mine closure. The failure to
secure or retain support from our
host communities as a result
of rapidly changing societal
expectations, or through
inappropriately managed social,
health, human rights or
environmental impacts at our
operations, could have a material
impact on the business.
For more information
see pages 24–35
Human rights
Anglo American has a longstanding
commitment to the
Universal Declaration of Human
Rights and we support the UN
Guiding Principles on Business
and Human Rights. We are
conscious that many aspects of
our business can impact on human
rights – including operational
safety, employment conditions,
land acquisition, water use, security
provision and engagement with
Indigenous Peoples. We are
committed to identifying and
managing these risks.
For more information
see pages 32–33
Water
Over the past few years, water has
become one of the most critical
factors in our social and legal
licence to operate. It has been a
key point of debate at a number
of projects, including our copper
projects at Quellaveco (Peru) and
Pebble (Alaska). Within our existing
operations, the principal risk factors
are security of supply, competition
with other users, increased unit
costs and more stringent water
quality legislation.
For more information
see pages 56–59
Climate change and energy
New policy measures are leading to
increasing energy and compliance
costs, including potentially
significant costs from carbon
pricing. We are witnessing
changing expectations from our
investors, communities and
customers in relation to carbon
management. We face increased
risks associated with the physical
impacts of climate change on our
operations and neighbouring
communities. Climate change
also presents opportunities in the
form of environmentally friendly
technologies used in our operations
and those which use our products,
as well as reputational benefits.
For more information
see pages 60–63
Employee health and safety
A safe and healthy workforce is an
engaged and productive workforce.
Effectively managing workplace
safety, occupational health, and
employee wellness (including the
management of diseases such
as HIV/AIDS and TB) is a direct
investment in the long-term health
of the business, its employees and
our associated host communities.
For more information
see pages 44–51
Workforce management
Meeting our growth objectives
depends on ensuring access to the
relevant skills necessary to meet
our business needs, having the
systems in place to develop and
retain talent, and maintaining
positive relations with all our
employees and trade unions.
For more information
see pages 40–43
Anglo American plc Sustainable Development Report 2012 13