Community

• Key issues 2006/2007
• Living our values
• Our scorecard
• Review 2006
• Case studies
• Objectives 2007

Review 2006

Management and governance

Community-related matters are addressed at board level, under the auspices of the Safety, Health and Sustainable Development Committee which has within its remit the evaluation of social, economic, environmental and health impacts of the company's operations on local communities. The committee comprises four non-executive directors – Bill Nairn (chairman), James Motlatsi, Sam Jonah and Simon Thompson – as well as two executive directors, Bobby Godsell (CEO) and Neville Nicolau (COO Africa).

AngloGold Ashanti is committed to engaging with non-governmental organisations (NGOs) and other stakeholders on issues of mutual concern. A number of meetings have been held with NGOs during the year and, where appropriate, joint monitoring and investigation processes are being put in place to deal with both legacy issues and ongoing stakeholder concerns at Obuasi and in the DRC.

AngloGold Ashanti has developed a Human Rights policy which it has asked several external parties to comment on prior to approval by its executive committee. It is expected that this policy will be implemented in a phased approach by the end of 2007. In addition, the company has applied to become a signatory to the Voluntary Principles on Security and Human Rights. (See Ethics and governance section)

The discussion that follows reports on the company's community-related performance in line with the company's business principles (in orange below).

AngloGold Ashanti and the community

Business principle 1:

AngloGold Ashanti's aim is to have a positive impact on the people, cultures and communities in which it operates. Accordingly, AngloGold Ashanti will be respectful of local and indigenous people, their values, traditions, culture and the environment.

As exploration and mining activities frequently occur in areas that are remote or regions where there is very little other economic activity, their relative impact is often heightened. The potential impact of exploration and mining activities needs therefore to be considered at the exploration stage, before any activities begin, right through the operations’ operating lives, to eventual closure and thereafter. A range of potential impacts and mitigating measures are identified during the environmental and social impact assessment, and mitigating measures are then incorporated into the Environmental Management Plans (EMPs) over operations’ life of mine and these are discussed further in the Environmental section.

In addition to the guidance provided by the company's values and business principles, the group's relationships with communities are often guided by operation or region-specific community policies where they exist. To inform and complement these, a company-wide management system, comprising guidance notes and toolkits are being developed and rolled out.

The South African socio-political landscape is governed by a range of legislation; the most important to the mining sector being the Mineral and Petroleum Resources Development Act (MPRDA) which requires that all mining operations submit and adhere to a Social and Labour Plan as a prerequisite to the granting of new order mining rights and report their compliance with the MPRDA in accordance with the Mining Charter. In addition to specific human resources-related issues, the Charter requires mining companies to engage with local communities in which the company’s operations are situated and from which it draws its workforce. AngloGold Ashanti was granted these conversions in respect of all of its operations in August 2005 will report on its compliance with the Mining Charter in 2007. This report may be accessed at www.anglogoldashanti.com

Artisanal and small-scale mining remains a significant challenge for the company. Currently baseline audits and action plans are being put in place at all mines and exploration sites where this is a material issue and interventions are most advanced at Geita. Other sites that are materially affected are Obuasi, Siguiri and exploration areas in the DRC and Colombia. (See AngloGold Ashanti’s approach to artisanal and small-scale mining).

AngloGold Ashanti is mindful that there are specific considerations that need to be taken into account regarding indigenous peoples. The company is also involved in this dialogue via the International Council on Mining and Metals and supports the Council’s draft position statement on indigenous peoples (http://www.icmm.com/news/1054Drafthighlevelpositionstatement-FINAL.pdf)

Business principle 2:

We will strive to ensure that surrounding communities are informed timeously of, and where possible, are involved in developments which affect them, throughout the life cycle of our operations.

The necessity for, and the process of, informing communities timeously of any developments, and maintaining their involvement throughout the operational life cycle, are enshrined in the law of many of the countries in which the group operates. This communication becomes especially important as operations, or portions of operations either gear up to full production or approach the end of their economic lives. These processes have now been formalised with the rollout of the Stakeholder Engagement Action Plan guidance note and accompanying resources and tools.

An example of this is the public consultation and disclosure programme developed at Sadiola and Yatela according to IFC guidelines, which is being implemented to good effect. (See case study in the Report to Society 2004, ).

Business principle 3:

We will undertake social investment initiatives in the areas of need where we can make a practical and meaningful contribution. In particular, we will contribute to those areas of education and health care which are relevant to our business activities, and those most likely to be sustainable once our operations have come to a conclusion in that community.

The group spent $7.75 million on corporate social investment in 2006 (2005: $8.19). Corporate social investment expenditure is defined as the voluntary investment of funds in the broader community, through programmes, which span a range of development and maintenance activities seeking to complement the work of government, non-government (NGOs) and community-based organisations (CBOs), where the target beneficiaries are external to the company. Corporate social investment specifically excludes those activities which the company is legally obliged to undertake or where the purpose is primarily commercial, for example marketing, employee benefits or public relations activities.

The vehicles for corporate social investment differ from region to region, and operation to operation, and are in line with the specific needs indicated by communities, for example, the AngloGold Ashanti Fund in South Africa (where most of the company’s employees are based). See case study on the AngloGold Ashanti Fund. These processes have now been formalised with the rollout of the Integrated Development Action Plan guidance note and accompanying resources and tools.

The AngloGold Ashanti Fund and Trust were managed by Tshikululu Social Investments, a specialist corporate donor support agency, for over eight years up until the end of December 2006. As a result of changes to AngloGold Ashanti’s corporate social investment strategy and its focus, it has been agreed between the company and TSI that, in future, it will be optimal for AngloGold Ashanti to mange its own CSI delivery. Great care has been taken in planning the handover to limit disruption to historic and potential beneficiaries of the AngloGold Ashanti Fund and Trust.

Business principle 4:

The company will encourage its employees to make themselves available for participatory and leadership roles in the community.

The following operation and country-specific programmes are in place:

• A long-standing volunteer programme exists at CC&V in the United States, where employees are encouraged to be involved in the community through volunteer service. Employees are rewarded with one hour of paid time off for every three hours volunteered for participation in community groups, and one hour off for every two hours volunteered for positions in government, such as serving on the City Council or Planning Commission.
• In South Africa, 49 employees at the corporate office participated in the 'give-as-you-earn' and matched volunteerism programme called Hearts of Gold. In total, corporate office employees volunteered 259 hours in their private capacity. During 2007 the programme will be rolled out to two South African pilot sites.
• In Brazil, volunteer time was donated by employees through the 'Holding Hands' programme. (See case study in Report to Society 2004)

Business principle 5:

We will seek to acquire and use land in a way which promotes the broadest possible consensus among interested people. Where involuntary resettlement is unavoidable, we will abide by appropriate guidelines for resettlement, where they exist, and in any event will work with the local communities to develop workable plans for any resettlement which may be necessary.

In 2004, the Board Committee on Safety, Health and Sustainable Development ratified the International Finance Corporation's (IFC) Safeguards on Involuntary Resettlement as its policy on resettlement. No new resettlements were undertaken during the year. Given the fact that there is potential for new resettlement during 2007, a company-wide guidance note is being developed to assist operations undertaking resettlement and compensation process, and this will be in place at all operations by the end of 2007.

As part of the company’s artisanal and small-scale mining strategy, AngloGold Ashanti is in the process of initiating joint programmes with government agencies and other interested and affected parties to identify and allocate land to alternative livelihood programmes, including artisanal and small scale mining, in Ghana, Tanzania, Colombia and Guinea. There is still considerable work to be done on this aspect of the strategy to deal with artisanal and small scale mining issues.

As reported in the Environmental section AngloGold Ashanti is participating in an ICMM initiated ‘integrated mine closure’ programme to address the integration of social, economic and environmental aspects in the closure process. We will continue to plan an active role in this process and a group-wide review of mine closure planning will be undertaken during 2007.

Business principle 6:

We will strive to contribute to the sustainable economic development of host communities through procurement activities; the contribution of redundant assets to the community; assistance in the establishment and growth of small- to medium-sized sustainable enterprises; and the outsourcing of goods and services from local vendors where appropriate.

AngloGold Ashanti believes that its operations and activities should contribute toward the long-term sustainable development of host communities.

This is particularly challenging for sometimes short-lived mining operations or exploration projects, particularly when there is only a limited period in which to make an impact.

Specific examples in 2006 include:

• In South Africa, the Small and Medium Enterprise Development Initiative (SMEDI) continues to identify people with ability and potential, and enters into a partnership with them to provide education, training and funding with the long-term aim of creating sustainable business. The raising of venture capital is managed through Masakhisane Investments Limited, which was established in 1999, with an initial capital of R10 million (then worth approximately $1.6 million). To date, jobs have been created for 3,800 people. (See case study: SMEDI continues to grow small businesses).
• Similar initiatives, such as the alternative livelihoods programmes, are being developed or are in place at all operations in less economically developed countries, such as Ghana, Guinea, Tanzania and Mali. At Iduapriem, for example, a local development agency has been contracted to manage the ‘Hand-in-hand’ Alternative Livelihoods programme. This programme will affect about 280 people and incorporate aspects such as income generating activities and micro-credit (with an emphasis on women, education and organisational capabilities). Similar programmes are planned for Obuasi during 2007.