PRESENTATION ON

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PRESENTATION ON SUSTAINABLE DEVELOPMENT AND CORPOR
ATE RESPONSIBILITY ISSUES 29 April
2003 Anglo American
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Presentation Team Sir Mark Moody-Stuart
Chairman John Groom Safety, Health and
Environment Russell King Human Resources and
Business Development Nick Von Schirnding
Investor and Corporate Affairs Edward Bickham
External Affairs
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Safety, Health Environment

• Dr John Groom

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Global Mining Initiative

• Mining, Minerals and Sustainable Development
  project
• GMI Conference, Toronto
• International Council on Mining and Metals
• - Characterised by intensive engagement with
  stakeholders
• - Provided a solid basis for our participation at
  the Johannesburg World Summit on Sustainable
  Development
• - Anglo American played a key role

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International Council on Mining and Metals

• SD Charter
• A commitment to 10 key principles
• A commitment to be measured against them
• International engagement
• Global Reporting Initiative
• Community Engagement tools project with the World
  Bank
• World Bank Extractive Industries Review
• Extractive Industries Transparency Initiative

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Report to Society

• Scope now expanded to become an SD Report
• Business practices performance
• Workplace
• Safety
• Occupational health
• Human resources
• Environment
• Society
• Community health
• Social community initiatives
• Economic contribution
• Benchmarked against the GRI core indicators

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Environment

• Risk based prioritising
• Tackling global issues using local
  illustrations
• Energy and greenhouse gases
• Much improved linkage to units of production
• Climate change policy
• Value-at-risk study completed
• ISO 14001 certification now covers 51 of
  turnover. The target is full certification by end
  of 2004.

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Environment

• Water management
• Still reporting in aggregate
• Future focus will be on individual businesses
  where water issues are a priority
• For example, Lisheen, Namakwa Sands, Mantos
  Blancos and Mondi Paper have innovative water-use
  strategies

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Biodiversity

• Clear strategy
• Site biodiversity action plans to be developed
  (where not already in place)
• Link to environmental impact assessment and
  closure planning
• Corporate contributions to the global challenge
• Kew Millenium Seedbank
• Active partners in the ICMM/IUCN dialogue on
  mining and protected areas
• Key sponsor of the UNEP World Conservation
  Monitoring Centre in Cambridge

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Environmental Targets

• Besides the management system targets(ISO14001
  and FSC Certification), our business units are
  setting clear, quantifiable environmental targets
  that are of greatest relevance to their
  particular circumstances and their communities.
• Many such specifics are listed on p. 51 of our
  report.

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Technological Innovations

• Process RD and alternatives to traditional
  smelting (HBMS zinc pressure leach)
• Sulphate reducing bacteria for water treatment at
  South African coal mines
• Coal-bed methane recovery for use (Australia)
• Energy efficient technologies
• New smelting process will reduce Anglo Platinum
  SO2 emissions by 55 000 tonnes/year by end of
  2004
• Fuel cell technology joint venture with Johnson
  Matthey

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Legal Compliance

• 281 incidents were reported involving the
  regulatory authorities (336 in 2001)
• Fines paid totalled 162,000 (187 000 in 2001)
• Verification
• KPMG conducted their third review of our SHE
  performance and reporting
• Nine sites visited, and previous site visits
  reviewed
• Methane emission reporting remains incomplete

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Safety I
0.10
2.5
Lost time injury frequency rates (LTIFR)
2.26
Fatal injury frequency rates (FIFR)
2.0
0.08
1.50
1.5
0.06
1.0
0.04
0.87
0.64
0.033
0.031
0.5
0.02
0.020
0.00
0.0
2000 2001
2002 2003
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Safety II

• 127 000 employees c.65 000 contractors in
  managed operations
• 47 fatal injuries down by 33 from 2001
• Lost-time injuries down by 42
• Introduction of Golden Rules
• Safety performance an element of Executive and
  Management remuneration
• Much more remains to be done

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Safety III

• Challenging new targets set
• Visible felt leadership
• Training and the promotion of safe behaviour
• The development of leading indicators
• The fostering of a true safety culture
• OTTO Zero Tolerance, Target Zero
• Our clear goal is to do business without hurting
  people

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Occupational Health

• Developed integrated industrial hygiene/
  occupational health management guidelines
  roll-out commenced
• Performance audited against the guidelines will
  provide leading indicators

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Human Resources

• Russell King

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Key Issues

• Decentralised business model but with strong
  corporate values
• Corporate role to advise and facilitate
• Sceptical about utility of data aggregation

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Key Data

• 127 000 employees in managed operations of which
• Africa 85 000
• Europe 30 000
• The Americas 8 500
• Australasia 3 500
• Contractors c. 65 000
• 2002 no major industrial disputes
• Support freedom of association 70 union
  membership
• Training minimum 2.2 of total employment costs

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Human Resources Priority Challenges I

• DIVERSITY
• Ensuring equal opportunities throughout the
  organisation globally
• Gender
• c. 10 of employees are women
• c. 15 in management roles
• South Africa
• Employment Equity
• By 2008, 40 of managerial employees should be
  HDSAs (c. 22 in 2002)
• Longstanding programmes to develop HDSA managers,
  including through educational bursaries c. 600

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Human Resources Priority Challenges II

• Talent Management
• Key aspect of diversity agenda
• Part of senior management performance contracts
• Performance Management and Development
• Now cover about half of employees
• Employee Communication
• Developing two-way dialogues

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South African Challenges

• Black Economic Empowerment
• Nick Von Schirnding

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South African Challenges

• Minerals Development Petroleum Act
• Empowerment Charter
• 15 equity or production ownership in 5 years
• 26 equity or production ownership in 10 years
• Empowerment Scorecard
• Ownership beneficiation procurement employment
  equity human resources development housing
  conditions and community development
• Money Bill - consultation

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Anglos Black Economic Empowerment Commitment

• US1.8 billion in BEE transactions completed
• Procurement expenditure of US800 million from
  black-owned businesses

• Small business development
• Currently invested in 20 companies 1 000 jobs
• Khula Mining Fund
• Chairmans Fund support for education

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• Social, Community and
• Economic Issues
• Edward Bickham

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Human Rights

• Strong commitment in Good Citizenship
  Principles
• Support Universal Declaration
• Commitment to make representations on behalf of
  employees and communities
• Major issues in Zimbabwe
• Consideration of adherence to Voluntary
  Principles on Security and Human Rights
• Child labour
• Development of best practice in relation to
  indigenous peoples

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2002 - Controversies

• Zambia withdrawal from KCM
• Colombia Resettlement
• Congo UN Special Panel

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HIV/AIDS - I
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HIV/AIDS - II

• Voluntary counselling and testing
• ART initiative for employees (24 infection rate)
• Treatment protocols in place
• 30 sites now registered for ART
• Estimate 3 000 on treatment after 12 months
• Seeking to broaden coverage of ART
• Emphasis on community partnerships
• Zimbabwe
• Western Cape
• KwaZuluNatal

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Communities I - Objectives

• Engagement and consultation
• Enhance capacities / economic upliftment
• Improved management of socio-economic impacts
• Community projects to reflect local priorities

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Communities II - Engagement

• Community Engagement Plans 3-year rolling
• Consultation
• Management of key issues
• Complaints procedures
• Contribution to local economy
• Support for community projects
• Resources and accountabilities
• Growth in Community Liaison Panels
• 2002 Community Engagement Guidelines and Good
  Neighbours publication

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Communities III Managing Impacts

• Social Impact Assessment for new projects
• Rapid Socio-Economic Assessment Methodology
  pilot projects
• Mondi Forest, SA
• Catalao, Brazil
• German Creek, Australia

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Communities IV Economic Upliftment

• Indigenous management and local labour (eg,
  Skorpion)
• Creative use of procurement
• Income generation schemes
• Small business development model

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Corporate Social Investment

• CSI expenditure US28.8 million
• 0.9 of pre-tax profit
• Priorities education, health and community
  development
• Chairmans Fund leading social investment vehicle
  in South Africa
• ENGAGE campaign employee volunteering

1999 2000
2001 2002
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Economic Contribution
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Payments to Governments
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(No Transcript)
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Good Citizenship Assurance and Reporting
Operations Annual Letter of Assurance

• Launch Briefings
• Training
• Integrate into
• management
• processes
• Provision for whistle-
• blowing

Business Principles
Divisional CEOs Letters of Assurance

• Supply Chain
• contractors
• suppliers
• contract compliance

Anglo American plc
KPMG Roll-out Review
Internal audit to carry out reviews on request
Report to Society
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Embedding Good Citizenship Principles

• Integration into decision-making
• Development of Programmes
• Communities
• Employee communication
• Business integrity
• Human rights
• Whistle-blowing
• Complaints
• Supply Chain Issues
• Improvement of social KPIs

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Reporting What Next?

• Stakeholder round-tables on evolution of Report
• Progress towards more divisional and local
  reporting
• Examining greater use of web as medium for
  detailed reporting