The mining industry operates in a highly dynamic business climate that increasingly demands successful adaptation to changes in social values and public expectations of corporate behaviour. At the corporate level, respect for both the physical and social environment is now considered to be an essential element of good business practice. Most major mining companies are now committed to the continuous improvement of their environmental performance, often going beyond the legal requirements, to include voluntary industry codes of practice and management systems. In addition, many international organizations, such as the UN, the World Bank Group and WHO, and financial institutions now have their own operating guidelines that include environmental and social issues.
Developing and signing up to voluntary codes is helping companies to gain greater public acceptance of corporate activities. However, it also requires a more open and proactive dialogue with a wider variety of interest groups. Corporate environmental reporting is rapidly becoming the preferred method for the voluntary public disclosure of information about a company’s impact on the environment, its performance in managing that impact and its contribution to ecologically sustainable development. Environmental issues are increasingly being linked with a much broader and more complex set of political and social issues including community development and corporate responsibility. Corporate social reporting is also growing as a voluntary method of disseminating information about a company’s social value and activities.
4.1 Environmental Management Systems
The majority of mining companies are increasingly concerned about achieving and demonstrating sound environmental performance to the public. Companies attempt this by undertaking internal reviews and audits to assess their environmental progress.
However, these internal checks cannot provide any assurance that a company’s performance meets, and will continue to meet, legislative and policy requirements. An Environmental Management System (EMS) seeks to integrate environmental responsibilities into every-day management practices through changes to organizational structure, responsibilities, procedures, processes and resources, thereby continuously improving the level of environmental performance.
The concept behind an EMS is to guarantee a certain standard of operation as a starting point and continuous achievement as a goal. It provides a structured method for company management and the regulating authority to have an awareness and control of the environmental performance of a project that can be applied at all stages of the life cycle from identification of a deposit to mine closure. The stages in an Environmental Management System cycle are:
• Organizational Commitment: the most important component of an EMS and often the most difficult to achieve. Commitment is essential at all levels of the company, from the top-level management to the labourer, because they all have a role to play.
• Environmental Policy: a public statement of the company's intention with respect to the environment, both social and physical.
• Socio-Economic Impact Assessment: the findings of the SEIA form the basis for ensuring that the benefits of the project are sustainable, and that negative impacts are minimized.
• Environmental Impact Assessment: the findings of the EIA form the initial objectives and targets that the company must achieve and procedures they need to implement.
• Community Consultation: the community includes the relevant government authorities, the immediate inhabitants of the area and any other communities that may be impacted by the project. Consultation and coordination should be undertaken at all stages of a project, before, during and after, to ensure that all concerns are adequately addressed.
• Objectives and Targets: these include:
• performance levels;
• compliance with regulations;
• reduction of environmental impacts;
• recycling of non-mine waste materials;
• internal savings (e.g. water use reduction); and
• easy public access to information.
• Environmental Management Plan: the methods and procedures by which the company will achieve the environmental objectives and targets.
• Documentation and Environmental Manual: containing all the environmental strategies, policies, responsibilities and procedures, clearly laid out and easily accessible.
• Operational Control and Emergency Procedures: all site operational and emergency procedures need to be identified and documented.
• Training: in order to ensure that there is total organizational commitment to the environment, all staff and operational personnel should undergo an environmental awareness course with specialist training for their specific area. This training needs to be updated and refreshed on a regular basis.
• Emissions and Performance Monitoring: regular reviews to ensure that the desired environmental outcomes are being achieved.
• Environmental and Compliance Audits: audits are a critical part of an EMS and the quality of the audit determines the quality of the system.
• Reviews: a review of the EMS should take place after the audit to ensure that the system is achieving or exceeding the company's environmental policy.
The EMS is a repetitive cycle with each stage being continuously re-visited and improved on each visit. Although it is designed as a tool for the company, an effective system provides an easy way for the regulatory authority to check compliance. The responsibility for setting up and running an EMS lies with the company. It can be done “in-house”, if there are available trained personnel, or through the services of consultants and specialists.
Most companies wishing to implement a formal EMS do so with the intention of seeking some form of accepted certification that will provide a means of confirming the company’s environmental credentials. The two primary schemes under which accreditation can be achieved are:
• International Standards Organization—ISO 14001
• EU Eco-Management and Auditing Scheme—EMAS
The most significant difference between the systems relates to the amount of detail that must be published to gain accreditation. Under ISO 14001 there is a requirement to publish an environmental policy and environmental objectives. No other information needs to be made publicly available. These policies and objectives are established by the company itself, rather than by an outside body, though they are assessed by the external certifiers and do have to take into account relevant environmental legislation and regulations.
Under EMAS there is a requirement to publish a formal environmental statement relating to the registered organization, site or enterprise. The aim of this is to make the environmental management process more transparent and to provide an opportunity for external evaluation of potential impacts and management procedures. EMAS includes the mechanisms for reviewing potential environmental impacts rather than reviewing the procedural aspects of an EMS. However, the requirements of ISO 14001 do not prohibit the incorporation of procedures for the continuous evaluation of environmental impacts. The success of the EMS depends largely on commitment from all levels of an organization and, in particular, from the highest levels of management. Certification of a formal EMS does not provide an absolute standard or measure of environmental management quality. Two identical projects, both certified under a formal scheme, could have
very different levels of environmental performance, and yet both are in total conformance with the standard.
4.2 Industry Codes and Charters
Most mining companies have adopted corporate environmental policies to demonstrate their commitment to improved environmental performance and to send a clear signal throughout the organization that environmental protection is a corporate priority. These policies are designed to promote the integration of environmental concerns into all aspects of corporate activity, from exploration to the closure of a mining project, and are given the same treatment as economic considerations. Many of the underlying principles of these corporate environmental policies have been adopted and incorporated into a common framework by mining associations for application on an industry-wide basis. Two examples are given below and both of these are given in full in Appendix 2.
At the international level, the International Council on Metals and the Environment (ICME) established an Environmental Charter that was developed and endorsed by its members. The Charter originally encompassed Environmental Stewardship and Product Stewardship and has more recently been expanded to include Community Responsibility principles. The Charter offers members both a direction and a framework for the continuous review and improvement of their environmental performance. Members of ICME are expected to adopt the Charter and to accept the importance of responsibly managing their operations and products and adopting appropriate measures to foster environmentally and socially sustainable development.
At a national level, in 1996 the Minerals Council of Australia launched a Code for Environmental Management on behalf of the Australian minerals industry. This Code was reviewed in 1999 and has recently been revised. In developing the Code, the mining industry recognized that:
• increasingly the community expects excellent environmental performance;
• while the industry’s environmental credentials were generally sound in a technical and scientific sense, the public remained largely unconvinced;
• despite the best intentions, and the best management in the world, some environmental incidents have occurred, but the risks must be controlled and minimized; and
• if the industry did not have in place a recognized and respected process for environmental self-regulation, then governments would police it with increasingly prescriptive and restrictive regulations—some of which would be neither environmentally nor economically effective.
The cornerstone objectives for the Code were to facilitate industry-wide improvement in environmental performance, to provide a transparent and consistent framework for environmental management, to strengthen relations with stakeholders and to enhance the community credibility of the Australian minerals industry. It is also seen as important to avoid creating a set of quasi-regulations that would duplicate government requirements. The Code is viewed as a living document, which will be continuously refined and developed.
The revised 2000 Code builds on its predecessor without changing its fundamentals or significantly altering the Code obligations. Signatories of the Code now commit themselves to a series of values, which are:
• integration of environmental, social and economic considerations into decision-making and management, consistent with the objectives of sustainable development;
• openness, transparency and improved accountability through public environmental reporting and engagement with the community;
• compliance with all statutory requirements, as a minimum; and
• a continually improving standard of environmental performance and, through leadership, the pursuit of environmental excellence throughout the Australian minerals industry.
4.3 Corporate Reporting
Many mining companies now prepare voluntary annual environmental reports for release to their employees, shareholders and the general public. These corporate reports give a summary of the environmental performance and compliance for the organization as a whole. Initially voluntary environmental reports were produced in response to public criticism, though they are now seen as a method of enhancing a company’s reputation. They are also often a requirement of any voluntary codes and charters to which the company is a signatory (see Section 4.2). However, there is no consistent approach adopted towards the format or level of detail these reports should contain, and companies have total discretion in publishing what they wish.
In recent years many guidelines and checklists have been developed, in an effort to standardize the format and content of voluntary environmental reports, and attempts have been made to “score” the reports that have been produced. It is suggested that sound reports would include at least the following elements:
• company overview including geographical locations, turnover, employees, markets, etc.;
• overview of environmental and social impacts;
• explanation of how the company is addressing these impacts through policies, management systems and targets;
• demonstration of how policies and systems are implemented;
• performance data, preferably related to targets; and
• references to further information, contacts and feedback information.
In addition, non-compliance and non-performance incidents should be reported alongside environmental achievements, and a third party should verify the information. The Global Reporting Initiative has recently produced the “Sustainability Reporting Guidelines on Economic, Environmental and Social Performance” (June 2000). These Guidelines were inspired by a global need to obtain a clear picture of the human and ecological impact of business, so that informed decisions about investments, purchases and partnerships could be made. 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. Paradoxically, this new approach to measuring
and reporting business impact has produced a proliferation of inconsistent reporting approaches, and organizations are at liberty to report what they choose about the economic, environmental and social aspects of their performance.
The Guidelines provide a framework for reporting that promotes comparability between reporting organizations while recognizing the practical considerations of collecting and presenting information across diverse reporting organizations. The Guidelines include a section on the suggested content for corporate reports that follows a logical framework, covers all aspects and should facilitate comparability and benchmarking. However, they are generic Guidelines and not specific to one industry.
Voluntary social reporting in the mining industry is an even more recent phenomenon than environmental reporting and occurs infrequently and inconsistently. Social performance is a key ingredient in assuring a company’s licence to operate and supports the company’s ability to deliver high-quality environmental and economic performance. While there is some agreement on measures for certain dimensions of social performance, they are not as well developed as measures of environmental performance. Social reporting provides an opportunity for the presentation of corporate social policy and provisions, measurement against social performance indicators and the systematic analysis of corporate community involvement.
4.4 Risk Assessment
Risk assessment and management is becoming increasingly important in the development of a mining project, where the uncertainties associated with environmental (and social) prediction are potentially higher than those of other industrial sectors. The process of risk management incorporates many different elements: from the initial identification and analysis of potential risks; to the evaluation of tolerability and the identification of potential risk reduction options; through to recommendations regarding the selection, implementation and monitoring of appropriate control and reduction measures. Before a risk can be managed it must be analyzed, and this involves a structured process that identifies both the likelihood and potential extent of adverse consequences arising from given activities, facilities or systems. Risk analysis attempts to answer three fundamental questions:
• What can go wrong?
• How is this likely to happen?
• What are the consequences?
Although risk assessment has a wide application in the mining industry, there would be little value in investing in detailed risk analysis if the potential outcomes did not influence the development or operational decision-making. The types of environmental risk that might be considered in relation to a mining development include:
• Risk of adverse environmental impact: as an extension of the EIA, risk analysis may be an effective means of estimating the probability that potential events will occur to help in allocating expenditure on environmental mitigation and defining opportunities for monitoring low-risk impacts.
• Risk of unplanned environmental expenditure: full assessment of potential environmental risks can be used to quantify possible expenditure on environmental protection in relation to impacts beyond a predetermined level of risk. Identification of potential risks before the start of development and continuously as development progresses allows a higher degree of confidence that financial provision for environmental expenditure is likely
to be adequate.
• Risk of unplanned operational constraints: unplanned environmental incidents can have a major impact on operational performance due to down-time resulting from the need to remedy adverse environmental effects or the need to change operational procedures as a consequence of unforeseen environmental issues.
• Social risk: local communities and interest groups continue to have an increasing influence on the development of new mining projects.
Public risk management is a rapidly growing area of risk assessment in the mining industry. A workshop on Managing the Risks of Tailings Disposal (UNEP/ICME 1997) identified the use of risk assessment as a key to safety and environmental protection in the application of total quality management in planning, design, construction, operation, monitoring and closure.
One of the conclusions of the workshop was that there is “a need for more extensive use of risk assessment methodologies” in addressing common issues. The increasing significance of social issues in the development of mining projects is generating interest in techniques for the more effective incorporation of social considerations in environmental planning. This in turn is creating a demand for reliable procedures for assessing the socio-economic risk as part of the project feasibility assessment and social risk management.
4.5 Institutional Guidelines
A number of international organizations have produced their own environmental guidelines, which are relevant to or specific to the mining industry. These include agencies such as the World Health Organization (WHO), the World Bank Group and the United Nations. In the case of the World Bank, the guidelines are designed to apply to all Bank Group funded projects although they are often used as a benchmark for other projects. Guidelines produced by agencies such as the WHO and the UN are more generic in nature and are intended
to provide a worldwide reference point. This section contains a brief description of a selection of the more commonly used guidelines.
The WHO’s main concern is with water quality, sanitation and human health. In 1996 the agency produced a revised version of “Guidelines for drinking-water quality, health criteria and other supporting information” with an addendum in 1998. This document includes “Selected Water Quality Guidelines” (see Appendix 6(a)), which are often used as a basis for water quality standards in national legislation. However, when referring to these tables it must be remembered that these are guidelines and not intended to be definitive but should be adapted to reflect existing conditions. They also relate to drinking water and are not directly relevant to industrial discharges.
In July 1998 the World Bank Group approved the “Pollution Prevention and Abatement Handbook” (published 1999), which replaces the 1988 “Environmental Guidelines”. The original guidelines were published to provide technical advice and guidance to staff and consultants involved in pollution-related projects. The new Handbook is specifically designed to be used in the context of the World Bank Group’s environmental policies, as set out in Operational Policy (OP) 4.01, “Environmental Assessment”, and related documents.
The guidelines contained in this Handbook are therefore subject to interpretation in the light of the results of the environmental assessment. The Handbook contains a number of industry sector guidelines that specifically relate to the mining sector. The World Bank Group, through the International Finance Corporation (IFC) Environment Division, has also produced a good practice manual entitled, “Doing Better Business Through Effective Public Consultation and Disclosure”. This manual provides the policy and procedural framework to deal with the need for, and benefits of, consultation with people affected by IFC projects. It is designed to reflect the IFC’s private sector mandate and project cycle and is modelled on the World Bank’s revised environmental and social policies.