Additional information
The following additional information on AngloGold Ashanti and communities is reported in compliance with GRI.
EC2: Financial implications and other risks and opportunities for the organisation’s activities due to climate change.
A comprehensive risk assessment was carried out during 2008/9 to determine the level of risk to which the company is exposed as a result of climate change. Various risk categories including financial and investment risk, risk owing to government policies and legislation, and physical risk, including local community vulnerabilities were considered. Key points include proactively assessing these risks and how being proactive could be used to the company’s competitive advantage. Also considered was the fact that, while regulatory requirements will become stricter in the near future, there will be differences in regulatory requirements across jurisdictions, which may in turn present both opportunities and challenges.
Some of the regulatory risks have already resulted in increased compliance costs for AngloGold Ashanti’s power suppliers whose costs are passed through to the company in the form of price increases. For instance, in South Africa since 2009, AngloGold Ashanti pays a levy of ZAR0,02 (recently increased to ZAR0.025) per kWh for electricity generated from fossil fuels. These levies may increase over time and additional levies may be introduced in the future in South Africa and other countries.
In addition, AngloGold Ashanti’s operations could be exposed to a number of physical risks from climate change such as increased rainfall, reduced water availability, higher temperatures and extreme weather conditions. Events such as flooding or inadequate water supplies could disrupt the company’s mining and transport operations, mineral processing and rehabilitation efforts, and could increase health and safety risks on site. Such events could also have adverse effects such as increased incidence of pests and disease prevalence in the company’s workforce and in communities in close proximity to the company’s operations. For more information, see: www.aga-reports.com/08/climate-change.htm and http://www.anglogoldashanti.co.za/Sustainability/Other+public+reports/Carbon+Disclosure+Project.htm.
EC3: Coverage of the organisation’s defined benefit plans obligations.
The group has made provision for pension, provident and medical schemes covering substantially all employees. The retirement schemes consist of the following:
Provision for pension and post-retirement benefits ($ million)
| 2010 | 2009 | |
|---|---|---|
| Defined benefit plans | ||
| AngloGold Ashanti Limited Pension Fund (asset) | – | (5) |
| Post-retirement medical scheme for AngloGold Ashanti Limited South African employees | 176 | 147 |
| Other defined benefit plans(1) | 12 | 10 |
| 188 | 152 | |
| (1)Other defined benefit plans comprise the following: | ||
| Ashanti Retired Staff Pension Plan | – | – |
| Obuasi Mines Staff Pension Scheme | 11 | 9 |
| Post-retirement medical scheme for Rand Refinery employees (asset) | (3) | (2) |
| Retiree Medical Plan for North American employees | 3 | 2 |
| Supplemental Employee Retirement Plan (SERP) for North America (USA) Inc. employees | 1 | 1 |
| Retiree Medical Plan for Nufcor South Africa employees | – | |
| 12 | 10 | |
AngloGold Ashanti Limited Pension Fund |
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| The plan is evaluated by independent actuaries on an annual basis as at 31 December of each year. The valuation as at 31 December
2010 was completed at the beginning of 2011 using the projected unit credit method. In arriving at their conclusions, the actuaries
took into account reasonable long-term estimates of inflation, increases in wages, salaries and pensions, as well as returns on investments. A formal regulatory valuation is required by legislation every three years. The regulatory valuation effective 31 December 2008 was completed in March 2010. The next regulatory valuation of the fund will have an effective date no later than 31 December 2011. All South African pension funds are governed by the Pension Funds Act of 1956 as amended. |
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| Regulatory information with respect to the AngloGold Ashanti Limited Pension Fund is as follows: | ||
| Benefit obligation | 334 | 269 |
| Fair value of plan assets at end of year | 334 | 274 |
| Funded status at end of year | – | 5 |
| Contributions (% of employee salary) – Employer |
22.15% | 12.5%–15% |
| – Employee | 6.15% | 7.5%–11% |
Investment policy |
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| The trustees have adopted a long-term horizon in formulating the Fund’s investment strategy, which is consistent with the term of the
Fund’s liabilities. The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions.
The trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities.
The strategic asset allocation defines what proportion of the Fund’s assets should be invested in each major asset class. The trustees
have then selected specialist investment managers to manage the assets in each asset class according to specific performance
mandates instituted by the trustees. The trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund’s overall investment philosophy and strategy. Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund’s Investment Sub-Committee at least every six months. |
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Post-retirement medical scheme for AngloGold Ashanti South Africa employees |
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| The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performed as at 31 December 2010. Information with respect to the defined benefit liability is as follows: | ||
| Unfunded benefit obligation | (176) | (147) |
Other defined benefit plans |
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| Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Postretirement medical scheme for Rand Refinery employees, the Retiree Medical Plan for North American employees, and the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (NUFCOR) – Retiree Medical Plan for Nufcor South Africa employees. | ||
| Information with respect to other defined benefit plans for the year ended 31 December 2010 has been aggregated and is as follows: | ||
| Benefit obligation | 22 | 18 |
| Fair value of plan assets at end of year | 10 | 8 |
| Unfunded status at end of year | (12) | (10) |
Defined contribution funds |
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| Contributions to the various retirement schemes are fully expensed during the year in which they are made and the cost of contributing to retirement benefits for the year amounted to $64m (2009: $53m). | ||
EC5: Range of ratios of standard entry level wage compared to local minimum wage at significant areas of operation.
In all regions, AngloGold Ashanti pays above the minimum wage, except where instructed otherwise by the local governments.
The resources industry offers some of the most competitive remuneration packages in the Australian economy. The ratio of overall entry level wages to the national minimum wage for Corporate and Regional Exploration is 1.97:1; and for Sunrise Dam Gold Mine is 2.18:1.
In Ghana minimum wages are set by government for the country. AngloGold Ashanti’s operations exceed these requirements and, in addition, provide benefits such as a provident fund, which are not provided for in legislation but negotiated through the collective bargaining process.
In Tanzania, a minimum wage has been legislated for the mining industry. This is well above other legislated minimum wages in the country as part of that government’s intention that mineworkers should benefit from the mineral wealth of the country.
EC6: Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation.
One of our core values of ‘Leaving the communities and societies better off for AngloGold Ashanti being there’ is reflected in our practice of engaging and transacting with suppliers in the communities surrounding our operations and in the countries in which we operate. Through this procurement practice, AngloGold Ashanti plays an active role in the expansion of the local economy by encouraging local skills development, providing business opportunities and a platform for technology enhancements which will lead to sustainable local businesses.
Our approach to procurement is to apply the total cost of ownership concept to our sourcing process and actively involve local suppliers in all areas of our procurement spend from strategic to tactical sourcing. This has led to key strategic relationships being developed with local suppliers in the areas of mining services, civil works, medical services, fuel and other strategic commodities.
Local supplier development has been identified as an important lever in increasing our contribution to the local economies hence AngloGold Ashanti’s participation in business development groups and supporting training and development of suppliers within the local areas. Our approach is to source locally if the product is available and is supported by the country’s infrastructure and supply capacity.
Operations in the United States of America, Brazil, Argentina, South Africa and Australia support and contribute to the development of the local mining supply markets. In Continental Africa, continuous work is being done on engaging with local suppliers about their product offerings and having multinational companies transfer their skills to the local employees. The summary of the local spend percentages in the table below includes goods which are indirect imports as well as locally-produced goods.
| Local spend % | 2010 | |||
|---|---|---|---|---|
| Argentina | 85.0(1) | |||
| Australia | 98.0(1) | |||
| Brazil | 72.2(2) | |||
| Ghana | 68.5(1) | |||
| Guinea | 74.0(1) | |||
| Mali | 82.5(1) | |||
| Namibia | 83.0(1) | |||
| South Africa | 99.9 | |||
| Tanzania | 75.0(1) | |||
| USA | 39.0(2) | |||
(1) Local spend is defined as spend in country
(2) Local spend is defined as spend in the state in which the operation is located
EC7: Procedures for local hiring and proportion of senior management and workforce hired from the local community at locations of significant operation.
Localisation, transformation and employment equity are significant issues for the company, particularly in South Africa, where legislation requires that reports relating to the number of foreign nationals, historically disadvantaged South Africans (HDSAs) and women are submitted to the Department of Labour on an annual basis. Please see our response under LA13 for more information on this issue.
AngloGold Ashanti employs expatriates in several other operating regions where localisation is government policy.
Localisation plans and programmes are in place to limit the placement of expatriate employees and to ensure the training, development and placement of local employees. The promotion of diversity and specific groups of employees is also regulated in:
- Namibia, through the Affirmative Action Act;
- Mali, through equal opportunity employment regulations within labour legislation;
- Australia, through the commonwealth, state and federal legislation dealing with equal opportunities for women, workplace relations, human rights, racial discrimination and disability discrimination;
- Brazil, specifically related to the disabled;
- Colombia, where the level of gender representation is prescribed by law within the public sector; expatriate levels and regulated by law in all sectors;
- Ghana, in the Ghanaian National Mining Sector Policy and the Minerals and Mining Act; and
- Guinea, through labour legislation.
The following table shows the number of expatriates working in the relevant locations:
| Country | Expatriate senior management in 2010 |
|---|---|
| Ghana | 20% |
| Guinea | 100% |
| Mali | 16% |
| Tanzania | 67% |
EC9: Understanding and describing significant indirect economic impacts, including the extent of impacts.
Mining and even exploration activities bring significant indirect economic impacts through, for example, decreased levels of joblessness, and trickle down effects on nutrition and education levels; tax income which is used by various spheres of government to make local and regional improvements on infrastructure and living conditions.
SO1: Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities, including entering, operating and exiting.
After embarking on a series of consultative exercises, the company has in the past reporting year been involved in a number of activities aimed at refining our understanding of the impact of our operational activities on communities. These include:
At Obuasi in Ghana, our Community and Social Development Department (the department) has in place stakeholder engagement action plans according to which three community consultative committee meetings and two community forums are held every week. In all, there are 28 consultative groups comprising 58 host communities. It is through this consultation process and direct receipt of complaints from the communities that issues of negative impact are addressed and can be amicably resolved or mitigated. Through reports and site visits, mine management is made aware of issues arising out of engagements with the communities and informed decisions are made to resolve them. At these engagements, local development needs of the communities are tabled and discussed with a view to assessing these needs and providing assistance where appropriate, within constraints of the department’s operating budget. Discussions at these meetings are participatory and ensure social inclusiveness and buy-in from the communities on matters concerning them. This participation process is followed with communities before, during and after they are impacted by our operations.
At Mongbwalu in the Democratic Republic of the Congo, we are working on a stakeholder engagement process to ensure that stakeholders have access to information on the project and can raise concerns and questions that are important to them locally, regionally and nationally. Stakeholders are given feedback on issues they have raised, and participate in the planning of project impacts and benefits.
Cerro Vanguardia’s impact is assessed through opinion surveys, media monitoring and meetings with opinion formers. CVSA’s initiatives are aimed at promoting sustainable development in our neighbouring communities. The San Julian Development Agency, a cooperative consortium consisting of representatives of the local community and business under the leadership of CVSA, encourages the community to actively participate in decisions pertaining to local development. A participatory sustainable development plan has been established by the agency that outlines future actions to be undertaken.
In Tropicana in Australia, the community engagement started in the exploration stages in 2002. Initial engagement established communication lines with local government and indigenous communities and as the project developed, these activities were expanded to include special interest groups in the fields of conservation, preservation, pastoralism and key decision-making authorities. A Peer Review Panel was established in 2008 comprising independent specialists who advise on survey methodology, report content, impact management strategies and interpreting community feedback. Eight years of engagement has involved a broad spectrum of communication techniques, including proactively seeking out stakeholders, listening and responding to their inputs.
SO6: Total value of financial and in-kind contributions to political parties, politicians and related institutions by country.
This additional indicator is categorised under the GRI aspect of public policy.
In 2010, AngloGold Ashanti donated approximately R5.6m (approximately $760,244) to various political parties and politicians in Brazil ($732,205), USA ($26,000), South Africa ($1,369) and Guinea ($670). In Brazil and the United States of America the donations were related to election campaigns, in Guinea the donation was used to subsidise air flights for party representatives based in Conakry to attend the swearing-in ceremony of the country’s new president. In South Africa the donations were towards membership of the Progressive Business Forum (a forum to facilitate the interaction between party leaders and business people).
SO7: Total number of legal actions for anti-competitive behaviour, anti-trust practices, monopoly practices and their outcomes.
This core indicator is categorised under the GRI aspect of anti-competitive behaviour.
The head of AngloGold Ashanti’s legal department is responsible for ensuring that significant legal issues considered as part of the risk management process are brought to the attention of the Audit and Corporate Governance Committee, which is responsible for risk management. A register of litigation matters to which the company has a possible financial exposure is maintained and reviewed on a quarterly basis.
A significant legal issue is defined as one that could result in a potential liability to the company and an issue with a potentially negative consequence for the company’s reputation, as assessed by the company executive. Significant legal liabilities have been defined as those with an impact on the following thresholds:
- If the matter is considered to be REMOTE then threshold amount is US$5 million.
- If the matter is considered to be POSSIBLE then the threshold amount is US$750 000.
- If the matter is considered to be PROBABLE then the threshold amount is US$750 000.
In 2010 there were no legal issues settled above these thresholds.
A former employee, Mr Thembekile Mankayi, instituted a legal action against AngloGold Ashanti in October 2006, claiming approximately $360,000 for damages allegedly suffered as a result of silicosis. AngloGold Ashanti learnt of the death of Mr Mankayi on 3 March 2011 and wishes to offer condolences to his family and friends.
In June 2008, judgement on an application was given in the company’s favour on the basis that mine employers are indemnified against claims by employees for damages relating to diseases compensated under existing legislation. An appeal by Mr Mankayi was dismissed by the Supreme Court of Appeal. In August 2010, the Constitutional Court of South Africa heard Mr Mankayi’s application for leave to appeal to the Constitutional Court. On 3 March 2011 the Constitutional Court granted the leave to appeal and simultaneously granted the Appeal. The effect thereof is that the executor of Mr Mankayi’s estate may return to the High Court to recover common law damages from AngloGold Ashanti and that they are not barred by legislation from doing so. AngloGold Ashanti has several defences available to it, and it will continue to defend the action.
SO8: Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations, and summary of judgments made against the organisation in areas related to health, safety and labour laws.
The head of AngloGold Ashanti’s legal department is responsible for ensuring that significant legal issues considered as part of the risk management process are brought to the attention of the Audit and Corporate Governance Committee, which is responsible for risk management. A register of litigation matters to which the company has a possible financial exposure is maintained and reviewed on a quarterly basis.
A significant legal issue is defined as one that could result in a potential liability to the company and an issue with a potentially negative consequence for the company’s reputation, as assessed by the company executive. Significant legal liabilities have been defined as those with an impact on the following thresholds:
- If the matter is considered to be REMOTE then threshold amount is US$5 million.
- If the matter is considered to be POSSIBLE then the threshold amount is US$750 000.
- If the matter is considered to be PROBABLE then the threshold amount is US$750 000.
In 2010 there were no legal issues settled above these thresholds.
A former employee, Mr Thembekile Mankayi, instituted a legal action against AngloGold Ashanti in October 2006, claiming approximately $360,000 for damages allegedly suffered as a result of silicosis. AngloGold Ashanti learnt of the death of Mr Mankayi on 3 March 2011 and wishes to offer condolences to his family and friends.
In June 2008, judgement on an application was given in the company’s favour on the basis that mine employers are indemnified against claims by employees for damages relating to diseases compensated under existing legislation. An appeal by Mr Mankayi was dismissed by the Supreme Court of Appeal. In August 2010, the Constitutional Court of South Africa heard Mr Mankayi’s application for leave to appeal to the Constitutional Court. On 3 March 2011 the Constitutional Court granted the leave to appeal and simultaneously granted the Appeal. The effect thereof is that the executor of Mr Mankayi’s estate may return to the High Court to recover common law damages from AngloGold Ashanti and that they are not barred by legislation from doing so. AngloGold Ashanti has several defences available to it, and it will continue to defend the action.
In South Africa, Section 54 of the Mine Health and Safety Act 29 of 1996 provides for the mine safety inspectorate to close part or all of a mine should it believe that any particular occurrence or condition may endanger the health and safety of any individual on the mine.
In 2010, no administrative fines were issued. A total of 46 instructions were received in terms of the Act, to close sections of mining operations to various degrees (this includes the four instructions issued to Tau Lekoa mine). Not all of these followed fatal accidents and in some cases the Section 54 notices were issued following routine inspections or serious accidents. In total, 77 full shifts at our various South African operations were lost as a result of the imposition of these instructions (2009: 44). In response to each instruction, an investigation was undertaken and remedial actions proposed and implemented.
MM6: Number and description of significant disputes relating to land use, customary rights of local communities and Indigenous Peoples.* and MM7: The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary rights of local communities and Indigenous Peoples, and the outcomes.*
* Partial response to GRI Mining and Metals Sector Supplement indicators coming into effect from January 2012.
These indicators are categorised under the GRI aspect of community.
AngloGold Ashanti requires sites to report to the corporate office all community incidents that are high, major or extreme. Seven community incidents were reportable in 2010, four of which occurred at the Siguiri mine in Guinea, one at the Geita mine in Tanzania, one at the Sadiola mine in Mali and one at the Obuasi mine in Ghana.
Two of the incidents were classified as major incidents as per the incident reporting system in place. Of these two major incidents, one occurred at the Geita mine when approximately 150 local community members protested against delays in compensation payments. These payments have now been effected. The other occurred at the Sadiola mine in Mali, when local residents protested against the failure of the mine to respond to various grievances including a demand for the removal of the human resources manager at the mine. Responses to the grievances raised were given following a mediation meeting attended by local community representative and chaired by a local government representative.
MM8: Number (and percentage) of company operating sites where artisanal and small-scale mining (ASM) takes place on, or adjacent to, the site; the associated risks and the actions taken to manage and mitigate these risks.*
* Partial response to GRI Mining and Metals Sector Supplement indicators coming into effect from January 2012.
AngloGold Ashanti’s position on artisanal small-scale miners’ (ASM) is that the group will, first and foremost, act in accordance with local regulations and legislation. However, the company recognises the historical and current roles and rights of artisanal and smallscale miners, and that engagement is a critical factor in dealing with the issue. AngloGold Ashanti believes that co-existence with artisanal and small-scale miners is not only possible, but also desirable. The group is in favour of promoting the development of orderly, viable ASM sectors in collaboration with host communities and governments in exchange for respect for the security of the group’s operations.
Ghana
Obuasi mine has a dialogue with the Obuasi Artisanal Small-scale Miners’ (ASM) Association as part of the mine site’s engagement plan. The partnership between Obuasi mine and the ASM Association has contributed to controlling the activities of illegal mining operators on the mine concession. The association’s quest for prospecting and mining license is being reviewed by the Minerals Commission.
Colombia
While there is no known small-scale or artisanal mining in La Colosa, approximately 120 miners have been identified in Gramalote in an initiative undertaken by AngloGold Ashanti. It is anticipated that AngloGold Ashanti will undertake a pilot programme whose purpose is to engage these miners. The engagement is planned to include workshops to understand the miners’ issues and expectations, studies to understand the economic linkages and situation, and identify a number of potential initiatives to partner with the miners in the future.
MM9: Describe resettlement policies and activities: identify sites where resettlements took place and the number of households resettled in each.*
* Partial response to GRI Mining and Metals Sector Supplement indicators coming into effect from January 2012.
Following a detailed review of the company’s resettlement and compensation practices in 2007, AngloGold Ashanti has developed a new approach to land management. This draft standard which is currently under global review draws on the International Finance Corporation’s (IFC) policies on Involuntary Resettlement, AngloGold Ashanti’s policy on resettlement, and associated land management practices. Provision is made for grievance mechanisms in the standard.
Tanzania
There were no new resettlement projects at Geita initiated during the reporting period. The company continues to engage with local leadership to find solutions for the outstanding compensation claims of 25 property owners in the Katoma area. The owners are claiming compensation after having declined the same at the rates used for their counterparts in 2007.
Colombia
AngloGold Ashanti has been engaging the host community in El Diamante with regards to the resettlement of 35 families in close proximity to the La Colosa project. In accordance with AngloGold Ashanti’s policy on resettlement, the company has been partnering with the community to design an appropriate resettlement strategy which is aligned to IFC standards on resettlement. To this end, an Integrated Social and Economic Social Plan aimed at ensuring the re-establishment of the community’s livelihoods has been developed in partnership with the community. It is anticipated that the resettlement will commence in 2011.
