ISO 26000, the international guidance standard on social responsibility, was released in late 2010, following a six-year development process involving hundreds of participants from more than 90 countries.
The new guidance has potential implications, benefits and challenges for the mining industry.
It can be used to help navigate the complexity of the ‘social licence to operate’, and deliver social and environmental outcomes through the heart of the project development and delivery process, rather than as an add-on.
ISO 26000 was developed to find the ‘golden middle ground’ between strict legislation and complete laissez-faire; to draw on existing knowledge and reference documents without stifling creativity in integrating social responsibility into organisations.
ISO 26000 provides guidance to every kind of organisation on:
Concepts, definitions and trends with respect to social responsibility;
Core issues and principles of social responsibility;
Integrating, implementing and promoting socially responsible behaviour throughout the organisation;
Identifying and engaging with stakeholders; and
Communicating commitments and performance on social responsibility.
ISO 26000 provides the most relevant information on each subject (drawn from internationally accepted standards and conventions), and concrete advice on actions that organisations should take to comply with internationally accepted standards and stakeholder expectations.
The core subjects are: organisational governance; human rights; labour practices; the environment; fair operating practices; consumer issues; community involvement and development.
In addition to the specific actions that companies should take to address each subject, the standard provides guidance on integrating social responsibility throughout an organisation, including:
Conducting a review of the organisation, current performance and capabilities, its operating environment and stakeholders;
Determining the relevance and significance of the core subjects to the organisation;
Establishing priorities for addressing issues;
Developing strategy, building capacity, and integrating social responsibility into systems and procedures;
Communicating on social responsibility;
Enhancing credibility on social responsibility; and
Monitoring progress and improving performance. Social licence to operate
The mining sector has long recognised the importance of the social licence to operate in maintaining a viable, sustainable industry. It is also one of the most challenging aspects for companies to manage.
Examples of where the social licence to operate is damaged, or revoked, are frequently reported and received, commented on and acted upon by a variety of interest groups worldwide. There is a significant risk of damaged corporate reputation, and increased scrutiny of current and future operations.
It is the complexity of issues and drivers bound up in the social licence to operate that make it so difficult to address comprehensively. For example, the International Council on Mining and Metal’s (ICMM) Sustainable Development Framework covers aspects as diverse as sound business conduct, human rights and respect for other cultures, risk management, health and safety, environment, biodiversity, product stewardship, community development and effective stakeholder engagement.
The future will become no less complex. Access to energy, water security, adaptation to the effects of climate change and social unrest are just some additional issues with which mining companies will need to deal. These issues will intensify the key challenge of many companies: translating corporate strategy into tangible and meaningful on-the-ground outcomes that protect the social licence to operate.
There are a large number of national and international standards, initiatives and guidance documents to help companies achieve better social responsibility outcomes. Some examples relevant to the mining sector are the ICMM framework, the Extractive Industries Transparency Initiative (EITI) and the UN Global Compact.
So why is a new standard needed, given the multitude of already existing standards? Will it not just place an additional burden on companies already struggling with compliance and other requirements? ISO 26000 is definitely a standard that stakeholders will increasingly want to see addressed by the organisations with which they interact, similar to I SO 14001, which is by now almost a minimum requirement. It is likely that ISO 26000 will be adopted in public policy and public procurement, given the strong involvement of governments in 83 countries in its development. Virtually all of the OECD member countries nominated experts to participate.
ISO 26000 should, however, not be seen as an additional burden, replacing existing standards and initiatives, but rather as a comprehensive umbrella framework that brings them all together.
It draws on all relevant ISO, OECD, United Nations and International Labour Organization (ILO) conventions, standards, recommendations and reports.
It also references all major inter-governmental and cross-sectoral initiatives, such as the UN Global Compact, the Global Reporting Initiative, the ICMM Framework and the Equator Principles.
The broad provenance of ISO 26000 leaves little need to understand multiple documents. An organisation that takes the guidance seriously will address the vast majority of aspects covered in the major sustainable development standards and initiatives. It will also be well placed to achieve high marks in reporting and sustainability assurance standards.
There is a first-mover advantage in aligning an organisation’s corporate strategy with ISO 26000 and communicating this accordingly. Many organisations will go through the process of developing frameworks for implementation and reporting over the next five to ten years. Those who approach the process quickly, thoroughly and decisively (and communicate their progress in a credible manner) will be more visible to stakeholders.
Companies that are already working to embed sustainable development and social responsibility into their operations will find ISO 26000 a useful additional guidance document to help identify and address issues relevant to their business context.
The benefits of integrating social responsibility, according to ISO 26000, include:
More informed decision-making, based on a better understanding of stakeholder expectations, as well as the risks and opportunities associated with social responsibility;
Improved risk-management practices;
Enhanced reputation, greater public trust and social licence to operate;
Generating innovation;
Improved competitiveness, including access to finance and preferred partner status;
New perspectives through better relationships with stakeholders;
Enhanced employee attraction, loyalty, participation, morale and retention;
Better employee health and safety;
Savings associated with increased productivity and resource efficiency (lower energy and water use, decreased waste and recovery of by-products);
and
Reduced or prevented potential conflicts with consumers about products or services.
One of the challenges associated with ISO 26000 is the fact that, as opposed to ISO 14001, it is not for certification. Organisations cannot simply go through the motions to attain ISO certification (and credibility), but need to comprehensively review and potentially revise their organisational strategy to embed social responsibility.
The standard provides considerable guidance material on how to embed social responsibility in organisations. However, it can be difficult to understand where to start, or where the key areas of risk and opportunities lie. This is especially the case where an organisation already has some social responsibility or sustainability activities.
Arguably, a key challenge is the translation of corporate sustainable-development policies into positive, on-the-ground outcomes. Many companies struggle with this disconnection between strategy and operations. Applied comprehensively and decisively, ISO 26000 can certainly help to bridge the strategy implementation gap.
Given the volume of the standard document, and the complexity and linkages between issues, this can be a daunting task.
What companies need are tools and processes that can help them to implement ISO 26000 in practical ways.
This could be done at either an organisational or project level, and could include identifying issues of strategic importance, finding risks and opportunities, understanding the company’s current capacity to respond to issues, benchmarking against peers and best practice, and engaging internal and external stakeholders.
To facilitate this process, specifically for projects, SKM has developed a ‘sustainability by design’ process, which translates the broad concept of sustainability (or corporate objectives relating to sustainable development) into specific, on-the-ground outcomes with tangible benefits.
Given that many of the issues contributing to the social licence to operate are intricately linked, the ‘sustainability by design’ approach provides a holistic, comprehensive methodology, as opposed to addressing each issue in isolation.
A key element of the SKM approach is working with the project team to establish which outcomes will best contribute to achieving a social licence to operate for a particular project.
A critical step is to set a clear vision and specific objectives to establish a project’s positive legacy potential. In a carefully structured process, Sinclair Knight Metz (SKM) uses proven tools and techniques that take a step back from the project detail, and build an integrated picture of the project, its challenges and opportunities through:
Identifying the organisation’s drivers, priorities, policy and strategic context;
Encouraging critical, creative thinking around project challenges and opportunities;
Challenging assumptions;
Understanding the holistic context of a project;
Working with the various project interfaces; and
Identifying integrated design solutions.
SKM has applied the ‘sustainability by design’ process successfully on a number of large-scale mining projects, including a copper mine in Papua New Guinea, a major port upgrade in Western Australia and a coal mine expansion in Queensland.
The process has helped to achieve a clear line of sight for project-specific sustainability objectives with all relevant policies and principles (including those from peak industry bodies), as well as translating these into more specific design criteria for each of the work areas.
It enables companies to design and apply a sustainability-based evaluation framework to all major design decisions, and facilitates discussions on an approach to regional social and economic development, and the project’s positive legacy.
Incorporating sustainable development considerations directly into the design of a project can add significant value and contribute to its social licence to operate without necessarily raising costs.
In many cases, more efficient and longer-lasting solutions are identified.
This is a marked contrast to the traditional approach to projects: go straight to the solution, accept assumptions as ‘givens’, complete project tasks within their relevant discipline boundaries – and miss opportunities for more integrated solutions. A ‘sustainability by design’ approach reinforces the adage that the whole is definitely more than the sum of its parts.
Companies in the mining sector should consider the following actions to help achieve and maintain a social licence to operate:
Familiarise themselves with the guidance and recommendations of ISO 26000;
Identify internal and external trends and drivers (economic, social, political, environmental, legal and technological) that will impact the organisation and its value chain in the future;
Assess how well the organisation is currently set up to deal with the expected implications of these trends;
If there is room for improvement, conduct a gap analysis of existing activities (such as strategy development and stakeholder engagement) against the processes set out in ISO 26000;
Consider how existing processes and systems could be adapted to enable better translation of corporate sustainability strategy and policies into positive outcomes on projects; and
Identify priority actions that address the key risks and opportunities identified through this process.
ISO 26000 can be an effective enabler for achieving a social licence to operate if it is supported by appropriate tools and processes for practical application. Stakeholders will increasingly expect to see reference to how ISO 26000 is addressed by organisations.
Organisations that act quickly and credibly will benefit both from a first-mover advantage, and from the operational and reputational benefits of integrating social responsibility.
Research by the Business and Human Rights Resource Centre, which tracks the performance of more than 4,000 companies, reveals the following recent cases (all published in February and March 2011) where the social licence to operate is at risk.
International NGO Human Rights Watch released a 94-page report called ‘Gold’s Costly Dividend: Human Rights Impacts of Papua New Guinea’s Porgera Gold Mine’. The report highlights allegations of serious human rights abuses, including alleged gang rapes, by private security personnel employed at the mine.
Human Rights Watch said that, in response to its investigation, Barrick had taken meaningful steps to investigate past abuses and make it less likely for similar abuses to occur in future.
The South African government is considering the introduction of a new environmental tax to address future cases of acid mine drainage.
Environmentalists have termed AMD as the biggest single threat to the country’s environment.
The world’s first Fairtrade and Fairmined hallmark for gold was launched in the UK. The label aims to provide artisanal miners with a fair wage and improve transparency in the global gold-supply chain.
A report funded by the International Labour Organization (ILO), and produced by the Asia Indigenous Peoples Pact, claims more than half of India’s mineral wealth is obtained by violating the rights of indigenous peoples.
The Guinean government has enlisted the help of billionaire investor George Soros to review the nation’s mining code and fight corruption in the sector.
The new code will punish companies caught bribing officials and will retroactively punish current licence holders.
Carolin Seeger is a senior sustainability consultant at Sinclair Knight Merz in Melbourne, Australia
The new guidance has potential implications, benefits and challenges for the mining industry.
It can be used to help navigate the complexity of the ‘social licence to operate’, and deliver social and environmental outcomes through the heart of the project development and delivery process, rather than as an add-on.
What is ISO 26000?
ISO 26000 provides guidance to every kind of organisation on:
Concepts, definitions and trends with respect to social responsibility;
Core issues and principles of social responsibility;
Integrating, implementing and promoting socially responsible behaviour throughout the organisation;
Identifying and engaging with stakeholders; and
Communicating commitments and performance on social responsibility.
ISO 26000 provides the most relevant information on each subject (drawn from internationally accepted standards and conventions), and concrete advice on actions that organisations should take to comply with internationally accepted standards and stakeholder expectations.
The core subjects are: organisational governance; human rights; labour practices; the environment; fair operating practices; consumer issues; community involvement and development.
In addition to the specific actions that companies should take to address each subject, the standard provides guidance on integrating social responsibility throughout an organisation, including:
Conducting a review of the organisation, current performance and capabilities, its operating environment and stakeholders;
Determining the relevance and significance of the core subjects to the organisation;
Establishing priorities for addressing issues;
Developing strategy, building capacity, and integrating social responsibility into systems and procedures;
Communicating on social responsibility;
Enhancing credibility on social responsibility; and
Monitoring progress and improving performance. Social licence to operate
The mining sector has long recognised the importance of the social licence to operate in maintaining a viable, sustainable industry. It is also one of the most challenging aspects for companies to manage.
Examples of where the social licence to operate is damaged, or revoked, are frequently reported and received, commented on and acted upon by a variety of interest groups worldwide. There is a significant risk of damaged corporate reputation, and increased scrutiny of current and future operations.
It is the complexity of issues and drivers bound up in the social licence to operate that make it so difficult to address comprehensively. For example, the International Council on Mining and Metal’s (ICMM) Sustainable Development Framework covers aspects as diverse as sound business conduct, human rights and respect for other cultures, risk management, health and safety, environment, biodiversity, product stewardship, community development and effective stakeholder engagement.
The future will become no less complex. Access to energy, water security, adaptation to the effects of climate change and social unrest are just some additional issues with which mining companies will need to deal. These issues will intensify the key challenge of many companies: translating corporate strategy into tangible and meaningful on-the-ground outcomes that protect the social licence to operate.
How can ISO 26000 help?
So why is a new standard needed, given the multitude of already existing standards? Will it not just place an additional burden on companies already struggling with compliance and other requirements? ISO 26000 is definitely a standard that stakeholders will increasingly want to see addressed by the organisations with which they interact, similar to I SO 14001, which is by now almost a minimum requirement. It is likely that ISO 26000 will be adopted in public policy and public procurement, given the strong involvement of governments in 83 countries in its development. Virtually all of the OECD member countries nominated experts to participate.
ISO 26000 should, however, not be seen as an additional burden, replacing existing standards and initiatives, but rather as a comprehensive umbrella framework that brings them all together.
It draws on all relevant ISO, OECD, United Nations and International Labour Organization (ILO) conventions, standards, recommendations and reports.
It also references all major inter-governmental and cross-sectoral initiatives, such as the UN Global Compact, the Global Reporting Initiative, the ICMM Framework and the Equator Principles.
Benefits and challenges
There is a first-mover advantage in aligning an organisation’s corporate strategy with ISO 26000 and communicating this accordingly. Many organisations will go through the process of developing frameworks for implementation and reporting over the next five to ten years. Those who approach the process quickly, thoroughly and decisively (and communicate their progress in a credible manner) will be more visible to stakeholders.
Companies that are already working to embed sustainable development and social responsibility into their operations will find ISO 26000 a useful additional guidance document to help identify and address issues relevant to their business context.
The benefits of integrating social responsibility, according to ISO 26000, include:
More informed decision-making, based on a better understanding of stakeholder expectations, as well as the risks and opportunities associated with social responsibility;
Improved risk-management practices;
Enhanced reputation, greater public trust and social licence to operate;
Generating innovation;
Improved competitiveness, including access to finance and preferred partner status;
New perspectives through better relationships with stakeholders;
Enhanced employee attraction, loyalty, participation, morale and retention;
Better employee health and safety;
Savings associated with increased productivity and resource efficiency (lower energy and water use, decreased waste and recovery of by-products);
and
Reduced or prevented potential conflicts with consumers about products or services.
One of the challenges associated with ISO 26000 is the fact that, as opposed to ISO 14001, it is not for certification. Organisations cannot simply go through the motions to attain ISO certification (and credibility), but need to comprehensively review and potentially revise their organisational strategy to embed social responsibility.
The standard provides considerable guidance material on how to embed social responsibility in organisations. However, it can be difficult to understand where to start, or where the key areas of risk and opportunities lie. This is especially the case where an organisation already has some social responsibility or sustainability activities.
Practical application
Given the volume of the standard document, and the complexity and linkages between issues, this can be a daunting task.
What companies need are tools and processes that can help them to implement ISO 26000 in practical ways.
This could be done at either an organisational or project level, and could include identifying issues of strategic importance, finding risks and opportunities, understanding the company’s current capacity to respond to issues, benchmarking against peers and best practice, and engaging internal and external stakeholders.
To facilitate this process, specifically for projects, SKM has developed a ‘sustainability by design’ process, which translates the broad concept of sustainability (or corporate objectives relating to sustainable development) into specific, on-the-ground outcomes with tangible benefits.
Given that many of the issues contributing to the social licence to operate are intricately linked, the ‘sustainability by design’ approach provides a holistic, comprehensive methodology, as opposed to addressing each issue in isolation.
A key element of the SKM approach is working with the project team to establish which outcomes will best contribute to achieving a social licence to operate for a particular project.
A critical step is to set a clear vision and specific objectives to establish a project’s positive legacy potential. In a carefully structured process, Sinclair Knight Metz (SKM) uses proven tools and techniques that take a step back from the project detail, and build an integrated picture of the project, its challenges and opportunities through:
Identifying the organisation’s drivers, priorities, policy and strategic context;
Encouraging critical, creative thinking around project challenges and opportunities;
Challenging assumptions;
Understanding the holistic context of a project;
Working with the various project interfaces; and
Identifying integrated design solutions.
Achieving ‘sustainability by design’
The process has helped to achieve a clear line of sight for project-specific sustainability objectives with all relevant policies and principles (including those from peak industry bodies), as well as translating these into more specific design criteria for each of the work areas.
It enables companies to design and apply a sustainability-based evaluation framework to all major design decisions, and facilitates discussions on an approach to regional social and economic development, and the project’s positive legacy.
Incorporating sustainable development considerations directly into the design of a project can add significant value and contribute to its social licence to operate without necessarily raising costs.
In many cases, more efficient and longer-lasting solutions are identified.
This is a marked contrast to the traditional approach to projects: go straight to the solution, accept assumptions as ‘givens’, complete project tasks within their relevant discipline boundaries – and miss opportunities for more integrated solutions. A ‘sustainability by design’ approach reinforces the adage that the whole is definitely more than the sum of its parts.
Recommendations
Familiarise themselves with the guidance and recommendations of ISO 26000;
Identify internal and external trends and drivers (economic, social, political, environmental, legal and technological) that will impact the organisation and its value chain in the future;
Assess how well the organisation is currently set up to deal with the expected implications of these trends;
If there is room for improvement, conduct a gap analysis of existing activities (such as strategy development and stakeholder engagement) against the processes set out in ISO 26000;
Consider how existing processes and systems could be adapted to enable better translation of corporate sustainability strategy and policies into positive outcomes on projects; and
Identify priority actions that address the key risks and opportunities identified through this process.
ISO 26000 can be an effective enabler for achieving a social licence to operate if it is supported by appropriate tools and processes for practical application. Stakeholders will increasingly expect to see reference to how ISO 26000 is addressed by organisations.
Organisations that act quickly and credibly will benefit both from a first-mover advantage, and from the operational and reputational benefits of integrating social responsibility.
Social licence to operate at risk
International NGO Human Rights Watch released a 94-page report called ‘Gold’s Costly Dividend: Human Rights Impacts of Papua New Guinea’s Porgera Gold Mine’. The report highlights allegations of serious human rights abuses, including alleged gang rapes, by private security personnel employed at the mine.
Human Rights Watch said that, in response to its investigation, Barrick had taken meaningful steps to investigate past abuses and make it less likely for similar abuses to occur in future.
The South African government is considering the introduction of a new environmental tax to address future cases of acid mine drainage.
Environmentalists have termed AMD as the biggest single threat to the country’s environment.
The world’s first Fairtrade and Fairmined hallmark for gold was launched in the UK. The label aims to provide artisanal miners with a fair wage and improve transparency in the global gold-supply chain.
A report funded by the International Labour Organization (ILO), and produced by the Asia Indigenous Peoples Pact, claims more than half of India’s mineral wealth is obtained by violating the rights of indigenous peoples.
The Guinean government has enlisted the help of billionaire investor George Soros to review the nation’s mining code and fight corruption in the sector.
The new code will punish companies caught bribing officials and will retroactively punish current licence holders.
Carolin Seeger is a senior sustainability consultant at Sinclair Knight Merz in Melbourne, Australia