Plenary V: Transparency for a Positive Developed Africa Canada-Africa Business Summit September 18, 2014 Mark Sitter Director, Corporate Affairs & Sustainability
Sherritt International Corporation • • •
World leader in mining/refining nickel laterites Operations in Canada, Cuba and Madagascar Licensed technology and services around world
Overview of Ambatovy +$7 billion: largest-ever FDI in Madagascar Annual Production: • Nickel • Cobalt • Ammonium sulfate
60,000 t 5,600 t 210,000 t
Built-in Transparency Drivers: Madagascar’s Law on Large-Scale Mining Investments transparently establishes the commercial terms, including royalties and taxes $2.1 billion in financing – IDBs, ECAs, Equator Banks Ownership Partners: • Sherritt (operator) • Sumitomo Corp. • Korea Resources Corp. • SNC-Lavalin Inc.
40% 27.5% 27.5% 5% 3
Transparency Is a Pre-requisite for Trust
Sharing of information across host governments, industry and communities is an important factor in earning trust 4
Our Sustainability Framework Commitment Areas Health and Safety Public Safety Rewarding Workplace Business Ethics Human Rights Tailings Management Biodiversity and Land Water Energy & Climate Change Stakeholder Engagement Transparency
Community Benefits
Our Commitment Our Transparency Transparency Commitment Provide stakeholders with timely and accurate information on the impacts and benefits of our mining-related activities and management practices
$ Payments to Governments
Local Content
Open Doors
Performance Reporting 6
Extractive Industry Transparency Initiative EITI Candidate Country
EITI Compliant Country
Other
Suspended
•The InEITI Africa: 17 countries are EITIMadagascar’s candidacy encourages companies, compliant and another 6 suspended 2009-2013 governments and civil society countries are in the Candidate •groups June 2014, Madagascar to work toward theregained category disclosure Candidate Country status transparent of payments Many the major mining •made During suspension, EITI worktoand byof extractive industries jurisdictions in Africa are now reporting continued governments covered and there is hope that • Ambatovy supportive/involved others will come on board in the • Beyond EITI, Sherritt is future supportive of Canada’s pending transparency reporting requirements 7
Value of Revenue Transparency Governments
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Helps to build popular support for strategies and policies designed to develop the extractive sector
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Demonstrates efforts to fight corruption and improve tax administration
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Helps people hold government authorities to account for use of revenues derived from the extractive sector – in Madagascar, this includes local governments
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Demonstrates significant economic benefits the company brings to a host country & communities
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Levels the playing field since all companies in the sector have to play by the same rules
Communities & Civil Society Companies
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Local Content – Jobs & Contracts We made a commitment to “hire locally and buy locally”
• ~90% of workforce local • ~60% of supply chain from Madagascar • +$2 billion in contracts to local suppliers since 2007
Our transparent approach to local content demonstrates how we meet this commitment and create local opportunities. This includes: A common and clear definition of what constitutes “local” Public posting of opportunities Transparency of our criteria and selection process – hiring, tech. training, suppliers Support of local businesses through training, mentoring, capacity building 9
Open Doors – Showing & Collaborating Info Centres, Road Shows, Site Visits, etc. In 2013: • 15,000 visitors at sites • 40,000 visitors at info centres • Thousands of interactions Robust grievance mechanism
Scientific Consultative Committee 16 independent environmental experts (national and international) – evaluations and recommendations on environmental programs
NGO Partnerships To develop mission-critical programs – such as: child protection, governance capacity building
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Performance Reporting Since 2008, Sherritt has published an annual sustainability report in line with the Global Reporting Initiative (GRI) •
Ambatovy-specific sustainability report since 2010, publicly released in French and English
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A platform to inform stakeholders of our performance on environmental, social and governance issues – key facts and figures, milestones, success stories and challenges
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Challenge: make relevant to local communities in rural areas
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Business Benefits of Transparency Our Transparency Commitment
$
Payments to Governments
• Increases understanding of revenue flows and creates accountability for revenue allocation
Local Content
• Maximizes opportunities for local economic participation • Demonstrates fairness and transparency in decision-making for jobs and contracts
Open Doors
• Enhances mutual understanding , reduces misinformation, fosters goodwill, addresses grievances fairly, enables collaboration
Performance Reporting
• Tells a “fuller” story about our sustainability commitments • Helps stakeholder to hold us accountable for our performance 12
Why Be Transparent? Transparency can directly contribute to a more stable, predictable, peaceful, and lawful business environment Reduced “external� risk is valuable to foreign investors looking to develop long-term, largescale, capital-intensive assets
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Thank You Sherritt International Corporation 1133 Yonge Street, Toronto, Ontario, Canada M4T 2Y7 Email: sustainability@sherritt.com Website: www.sherritt.com
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