Polymer Processing Cost Saving Workshop - 03 Sustainable Development
Sustainable Development workshop
Transcript of Sustainable Development workshop
Sustainable Development workshop
Joanne Farrell, Matthew Bateson, Laurel Green and Helen Newell
Sustainable Development workshop London 2016 21 October 2016
Rio Tinto Kennecott inland sea shorebird reserve
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Cautionary statement
This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”). By accessing/attending this presentation you
acknowledge that you have read and understood the following statement. In this presentation all figures are US dollars unless stated otherwise.
Forward-looking statements
This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Rio
Tinto Group. These statements are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, and Section
21E of the US Securities Exchange Act of 1934. The words “intend”, “aim”, “project”, “anticipate”, “estimate”, “plan”, “believes”, “expects”, “may”,
“should”, “will”, “target”, “set to” or similar expressions, commonly identify such forward-looking statements.
Examples of forward-looking statements include those regarding estimated ore reserves, anticipated production or construction dates, costs,
outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other factors set forth in this presentation.
For example, future ore reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect
the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our
products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency
exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and
political uncertainty.
In light of these risks, uncertainties and assumptions, actual results could be materially different from projected future results expressed or implied
by these forward-looking statements which speak only as to the date of this presentation. Except as required by applicable regulations or by law,
the Rio Tinto Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new
information or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results.
Disclaimer
Neither this presentation, nor the question and answer session, nor any part thereof, may be recorded, transcribed, distributed, published or
reproduced in any form, except as permitted by Rio Tinto. By accessing/ attending this presentation, you agree with the foregoing and, upon
request, you will promptly return any records or transcripts at the presentation without retaining any copies.
This presentation contains a number of non-IFRS financial measures. Rio Tinto management considers these to be key financial performance
indicators of the business and they are defined and/or reconciled in Rio Tinto’s annual results press release and/or Annual report.
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Injury frequency rates Per 200,000 hours worked
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Safety is fundamental to our business
• Whilst we have achieved our lowest ever injury rates, we are yet to achieve a fatality-free year
• We are focused on reducing injury rates and eliminating fatalities
• Health, Safety & Environment elevated to Executive Committee level in 2016
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Leadership
and culture
Critical risks
and controls Systems
and technology
Learning and
communication
Safety – our strategy
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Four key focus areas
• Critical risk management
• Learning critical lessons from
fatal and potential fatal
incidents
• Process safety
• Contractor safety
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Safety – current priorities
Critical risk management
Layered system of verifications
Front Line workers use critical control
checklists before beginning critical work
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Process Safety
Three facets:
1. End-to-end process safety
governance structures
2. Substantially improved
understanding of process
safety hazards
3. New process safety standard
with common set of
requirements for managing
technical complexities of
process safety risk
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The way we work
The way we work symbolises
what we stand for as a
business
It makes clear how we behave
according to our values of
respect, integrity, teamwork
and accountability
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• Material risk management and health
critical control monitoring plans
• Mental health
• Vector borne and infectious diseases
• Improving health reporting
• Health risk advisory panel
• Rössing epidemiological study
• Learning and communication
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Health – current priorities
Dampier Salt – R U OK? day
Mosquito
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Accreditation, membership and reporting
• Rio Tinto is assessed and included in a number of sustainability leadership indices:
− Dow Jones Sustainability Index
− FTSE4Good Index
− ACSI – Leading
• We are a member of leading sustainability associations, including:
− ICMM
− International Emissions Trading Association
• We have helped shape and participate in voluntary supply chain and transparency
initiatives:
− Responsible Jewellery Council
− Aluminium Stewardship initiative
− Extractive Industries Transparency Initiative
• We participate in or are accredited under a number of voluntary schemes, including:
− ISO – 14001 and OHSAS 18001
− Global Reporting Initiative
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Rio Tinto supports and is a member of the following organisations
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Environment – strategy
Maintain compliance at
the right cost
Look forward and
prepare the business
Minimise our liabilities
• Hazard identification and risk analysis
• Environment controls
• Incident identification, reporting, investigation
• Long-term focus of engagement with regulators and communities
• Horizon scanning
• Risk-focused external advocacy
• Stakeholder engagement
• HSEC in Design
• Innovation
• Design for closure
• Progressive rehabilitation
• Contaminated sites management
• Biodiversity mitigation hierarchy
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Environment – biodiversity, our journey
2009 Rio Tinto goal of NPI
for all very high & high biodiversity
value sites by 2015
2014
Rio Tinto biodiversity
management workshop
2016 Redefining biodiversity
management
2012
Internal target to have:
biodiversity action plans in place and in progress by
2015
2005 Land
stewardship standard
2007
IUCN assists Rio Tinto to conduct group-wide
biodiversity values assessment
2015 Release of new land disturbance & rehab
control standard
2004 Rio Tinto
announces biodiversity strategy and goal of NPI
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Biodiversity, managing the risks
• Replacing our NPI aspiration with a performance requirement for sites to
minimise residual biodiversity impact
• Biodiversity to be fully integrated into Rio Tinto environmental assurance
processes
• Focus on what we can reasonably achieve through avoidance,
minimisation and restoration.
• Financing or regulatory requirements maintained; offsets implemented in
response to regulator, financing requirements
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Climate change - GHG emissions intensity performance
• In 2008, we set a target of a 10%
reduction to be achieved by 2015
• By the end of 2015, we achieved a
21.1% reduction
• Major contributions from
divestment and closure of old
smelters, and the start of low
intensity operations (Kitimat, Oyu
Tolgoi)
• New target extended to 2020 -
aims for a 24% reduction relative
to our 2008 baseline
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Closure & Legacy Management
• Challenge for the whole
sector
• Life of mine planning
• Structured closure
planning process
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Closure & Legacy management • Global programme to rehabilitate,
remediate and manage long term
liabilities from closed sites
• Closure and step out from sites in
Europe
• Management under strict EPA
regulations in US
• Experience being passed onto
design, operation and closure
planning of existing sites
Sabart smelter, France
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Local school in Fort Dauphin, Madagascar
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Respect for human rights embedded across Group Core to our business practice:
• Key documents: The way we work, Human Rights Policy,
Supplier Code of Conduct
• Risk-based, integrated approach including stand-alone
studies where appropriate
• General and targeted online and in person training
• Multi-product group, cross-functional human rights
working group for better coordination
Consistent with global guidance and initiatives:
• Support and respect human rights consistent with the
Universal Declaration of Human Rights
• Implementing UN Guiding Principles on Business and
Human Rights
Active in global initiatives – continuous learning
• Voluntary Principles on Security and Human Rights
• UN Global Compact
• OECD Guidelines for Multinational Enterprises
• UN Annual Forum on Business and Human Rights
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Human Rights – key actions in 2015-16
Governance
• Human Rights Policy reviewed and updated
• New online human rights 101 and function specific (including procurement, security, communities) training modules developed
• Social and human rights risk assessment at Oyu Tolgoi
Reporting
• Continued to include human rights section in Annual and Sustainable Development reports
• Preparation for UK Modern Slavery Act statement (March 2017)
• Corporate Human Rights Benchmark
• UN Guiding Principles Reporting Framework database
Rio Tinto recognised for its human rights approach by an independent NGO, Business and Human Rights Resource Centre
Security and human rights
• Conducted Voluntary Principles on Security and
Human Rights and “use of force” training in
Mongolia, South Africa, Jamaica and Guinea
• Group-level audit of security and human rights;
implementation of audit recommendations
Responsible Supply Chain
• Pilot programme to review the Group’s third
party pre-tender due diligence process and
launch of Know your Supplier procedure
• Development and launch of new Supplier Code
of Conduct
Miners at Oyu Tolgoi, Mongolia
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Transparency – continued leadership
Rio Tinto supports tax transparency and
initiatives like EITI as a cornerstone of good
governance, to eliminate corruption in all its
forms and to improve understanding of the
mining sector’s economic contribution.
• Global and national involvement in Extractives
Industries Transparency Initiative
o Employee board member
o Employee representatives on multi-
stakeholder groups in Australia, Mongolia,
USA.
• Open and constructive engagement in the
development and implementation of mandatory
reporting legislation in the EU, UK, Canada
and USA
• Reporting consistent with UK legislation (EU
Accounting Directive) and Australian
Government Transparency Initiative
• Sixth Taxes paid report in June 2016 -
constructive contribution to ongoing debate
• We support consistent global standards of
transparency and tax reporting
Community Relations staff member and an agricultural
and livestock expert giving technical advice to a local
farmer, La Granja, Peru
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Taxes paid 2015 – most extensive report yet
• Sixth Taxes paid report - clear communication
with shareholders on complex topic.
o new information on our principles of tax
planning
o commentary on tax havens
• Rio Tinto is a very significant global taxpayer
and contributor to the economy
o $4.5 billion in taxes and royalties in 2015
o ~ $50 billion aggregate taxes and royalties
paid since first report in 2010
o > US$329 billion aggregate direct
economic contribution since first report
• Report aligns with new requirements of EU
Accounting Directive and compliant with
Australian Government transparency initiative
o 2015 report discloses payments on a “project
by project” basis
o Lower reporting threshold – $100 000
compared to previous $1 million
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Communities – building enduring relationships
All operations have 5 year communities targets:
• locally defined targets that demonstrate the local economic benefits of employment and procurement of goods and services
• capture and manage community complaints with year on year reduction in repeat and significant complaints.
• annual progress reports from 2017 and achievement by 2020
All operations must meet Communities and Social Performance Standards
• Rio Tinto Communities and Social Performance standards benchmarked against international standards on communities engagement including management of cultural heritage sites and resettlement
• All sites must comply from June 2016
• Business Conformance Audits being conducted to ensure compliance with standards.
Consultation with traditional owners from
local community in Weipa, Australia
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Communities – Why agreements matter
• We strive to build enduring relationships with our neighbours that are characterised by mutual respect, active partnership and long-term commitment
o minimise negative social impacts
o provide lasting socioeconomic benefits
o maximise local employment opportunities, small business development and local contractor opportunities
o resettlement is avoided where possible or proceeds in compliance with the IFC Performance Standards
o protection of cultural heritage
o recognising Indigenous peoples’ special connection to lands and waters
• Why agreements matter guide launched in 2016
o Builds on “Why cultural heritage/human rights/gender matters” series
o Basis for training and internal workshops in Montreal, London and in USA
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The risk management framework
Business
Operations
Rio Tinto Board (and its Committees)
Risk Management Committee
CEO
(and the Executive Committee)
Gro
up R
isk /
Com
pany S
ecre
tarial
Gro
up In
tern
al A
udit
Central Support
(includes Legal and Ethics & Integrity)
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Assurance
Three layers
of assurance
Avoided event
Standards, Guidance, operating practices
First party audits:
Operations
Second party audits:
Business conformance audits
Third party audits:
Internal / external audit
Risk / Hazard
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Risk mapping with a risk consequence scheme that aligns with Group Priorities and objectives
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Total Shareholder
Return
Growth
Cash
flow
Application-specific criteria: Eg, Human Rights, Information Security, Supply
Chain, Resource/Reserve
Standard criteria: Eg, Production, Revenue, Business Integrity, Legal/Reg,
Environment, Community/CSP, People
Bus.Value
(NPV)
Cash
Health Market
reputation
Trusted
Partner*
Trusted
Partner
Group Priorities Safety People Partnership
Safety
Group Objectives
Mandated
Group-level
consequences
Used at all PG,
BU & Site
Used only
when relevant
* Topic of ongoing Deep Dive
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SlopeGeotechnical
eventSlope design
Design implementation
Geology
Climatic events
Date uncertainty geology, rock mass strength, hydrology
Pit geometry
Loss of production/shut down
Loss of equipment & infrastructure
Fatality
Environment & community damage
Business interruption & customer confidence
Remediation costs
Reputation and loss of investor confidence
Lawsuits/liabilities
Employee retention
Loss of community confidence
World Class Portfolio
Operation and
Commercial Excellence
FCF Generation
First Line Controls· Geotechnical specialists· Site operating procedures· Clear accountability for slope
hazard management· Hazard awareness training
Second Line Controls· D3 Standard for Management
of Slope Geotechnical Hazards· T&I knowledge sharing· Technical Review Boards
First Line Controls· Onsite slope displacement
monitoring, systems and regular site observations
· External inspections· Geotechnical specialists
Second Line Controls· D3 Standard for Management
of Slope Geotechnical Hazards· T&I assurance processes and
knowledge sharing· T&I D3 standard audit process
First Line Controls· Business resilience &
recovery plans· Emergency response
teams
Second Line Controls· HSEC standards
First Line Controls· Business resilience &
recovery plans· External & internal
communications
Second Line Controls· HSEC standards· Insurance arrangements
Immediate Cause Immediate Impact Secondary Impact
Slope design method
Design/risk acceptance criteria
Availability of suitable equipment
Drill and blast load practices
Natural slopes
Underlying Cause
Drivers and consequences of a geotechnical event 25