‘Wherever the Group operates, good relations with its neighbours are fundamental to long-term success.’ So states The Way We Work, Rio Tinto’s Statement of Business Practice. As one of the world’s largest mining companies, with around 60 operations in more than 20 countries, Rio Tinto recognizes that to continue to operate successfully it must be accepted as a company with expertise and integrity, both globally and by its immediate neighbours.
‘Knowing that each local community is different,’ The Way We Work continues, ‘the policy of Rio Tinto is that every operation shall strive to understand and interact constructively with its local communities and assist their development in ways which apply the following principles: Mutual Respect, Active Partnership, Long-term Commitment.’
Locally determined programmes
At the local level, corporate support is usually focused directly on the needs of the communities around mine sites or operations. This tends to mean that a significant portion of funds are spent on health and education activities. The company also seeks to provide funding for projects that continue beyond the life of the mine.
Local operations have the flexibility to develop their own programmes. Central to this is consultation. Since 1997 every Rio Tinto mining operation has been required to draw up a ‘five year community plan’. This must contain a description of the community relations consultation process, the programmes and their cost. Important elements of the plan are an assessment of the social, cultural and economic characteristics of the community and an analysis of the strengths and weaknesses of the consultation process. Operations are centrally supported in this work by advisers, who make regular site visits, provide training and develop best practice models.
An example of a locally determined activity that reflects both local environmental needs and the business needs of the operation is a programme of research into koalas in central Queensland in Australia. Rio Tinto company Blair Athol Coal has for the last six years supported researchers at the University of Queensland studying the breeding ecology of koalas. The research will have operating implications for the process of mining, as koalas are reacclimatized to new locations following mining.
Funding to local communities may come from the company either directly or indirectly through a trust. Trusts have been established in a number of countries in which Rio Tinto has operations; all have both company and community representatives. The Palabora Foundation in South Africa, for example, supports projects working with disadvantaged communities within a 50km radius of the mine, while the Rossing Foundation in Namibia focuses on adult education and training and enterprise development in the craft sector. The Rio Tinto Indonesia Foundation works closely with the Indonesian government in operating a tuberculosis control programme.
Rio Tinto has a policy of forming partnerships with organizations that can make a substantive contribution to the way the company undertakes its business activities. Partnerships are thus being formed with NGOs that have expertise in areas such as environmental conservation and management, education, and corporate social responsibility.
The partnership between Rio Tinto and the Royal Botanic Gardens, Kew, in the UK is a good example. The partnership gives Rio Tinto the opportunity to work not only with Kew but also with a global network of botanical research institutes. Rio Tinto is financially supporting programmes of research that are important to both Rio Tinto and Kew, including the collection of samples in Madagascar and studies of the flora of parts of Indonesia and the management of vegetation in Brazil. Research results will be used in the development of a corporate biodiversity strategy as well as providing information that can be practically applied on issues such as land rehabilitation.
The company also encourages active employee involvement through partnerships. For some years Rio Tinto and the Earthwatch Institute have had a partnership which among other things allows 24 employees to take part in Earthwatch expeditions. This allows employees to work in the field with environmental experts and increases their understanding of conservation issues. Last year, the 24 employees came from nine different countries.
The company’s approach to partnerships
Rio Tinto sees partnerships as involving a long-term commitment, typically from three to five years. The aims and objectives are set out in a ‘Partnership Agreement’, which sets out goals for each partner, defines the objectives of the partnership and details the activities to be undertaken. Funding arrangements are clearly outlined, together with approval and reporting mechanisms and nominated liaison contacts. An evaluation strategy is also included so that the partnership can be fully reviewed, and ongoing financial support from the company is made dependent on the achievement of objectives.
Rio Tinto has supported some academic research into the area of partnerships by Professor David Birch at Deakin University in Melbourne, Australia, as part of a long-term programme to improve knowledge and expertise in the field of corporate social responsibility. Professor Birch has outlined nine key principles of partnership that can contribute to successful relations between the corporate and community sectors. These are summarized under the heading of ‘the Nine R’s’ of partnership, of which arguably the most important are Respect, Responsibility (the need for each partner to accept responsibility for their part in the relationship) and Reference. This last refers partially to the ‘need to be able to set measurable objectives and to benchmark against other partnerships’.
Rio Tinto continues to investigate better ways to report and measure its performance. As part of this the company has utilized the London Benchmarking Group model for recording community contributions. This year, for the first time, Rio Tinto has published not only its total community spend, which totalled some US$41 million, but also how this amount is divided between charitable gifts (8 per cent), community investment (69 per cent), commercial activities (6 per cent) and management costs (17 per cent).
A priority area of work will be the development of measurement tools that reflect the effectiveness of the company’s contribution of resources to neighbouring communities.
John Roskam is Corporate Affairs Adviser at Rio Tinto. He can be contacted by email at John.Roskam@riotinto.com