Good governance is good business, says Anglo American

Major international companies are under greater scrutiny than ever by regulators and the public. Here in a Q&A, Sir John Parker, chairman of mining group Anglo American, addresses how the company is meeting these ever-higher requirements


Companies are keener than ever to show off their sustainable development credentials. Are you really delivering benefits to the communities in which you operate?

As a company, unique among our peers, with more than 86 per cent of our activities in emerging economies and nearly a century’s operating experience, we need to demonstrate this commitment in the way we run our business and through our actions on the ground.

We produce a major report every year showing how we go beyond job creation, payment of taxes, royalties and dividends – all important wealth drivers in their own right – to leverage our supply chain, nurture entrepreneurship, develop human talent and capacity in and around our operations, contribute to healthier and better-educated communities, foster local economies and work to eliminate, minimise or mitigate the disturbance our activities can sometimes cause.

Some of the concerns that people have about the role of business in society stem from a lack of trust. To combat this, I believe that we should play our part, along with other stakeholders, in formulating a new informal “social compact” for business that encourages greater transparency, better governance, a shared understanding of the role and value of business to society, and accountability for our actions – of which this report forms part.

The mining industry is so risky. What do you consider to be the key risks for the sector and for Anglo American, and how are you managing them?

A significant risk area for mining – especially deep-level operations such as our own – and one that is of the highest importance to us, is safety. We retain an unerring focus on safety and I, as chairman, make sure it is the first item on the agenda at every Anglo American board meeting.

The sustainability of our business is inextricably linked to the sustainable development of the communities around our operations

I’m proud of the progress we have made in recent years. We have come a long way in a short time, though we recognise there is still a lot of work to do to deliver on our vision of zero harm. It is of great credit to our outgoing chief executive, Cynthia Carroll, and her senior leadership team that they led the safety agenda in such a way as to bring about real and lasting change in the way we approach safety. I know that our new chief executive, Mark Cutifani, is also determined to take a personal lead on this most fundamental of issues.

Being a responsible miner also means taking a serious approach to environmental stewardship. It is our responsibility to minimise and mitigate potential environmental risks that could affect our business or stakeholders.

How important is your social-responsibility work to groups such as investors, regulators and customers? Are they taking these issues more seriously these days?

As a mining company, our presence and activities create valuable products that make people’s lives better and which are crucial for the world’s ongoing development and, with it, poverty reduction. Our large footprint in the developing world means our capacity to contribute to the social and economic development of vulnerable communities beyond mining is significant. The sustainability of our business is inextricably linked to the sustainable development of the communities around our operations.

For many years we have worked to improve the way we operate so we can respond to our stakeholders’ needs. We have led the way in such areas as small and medium-sized business creation, community engagement and development using our internationally-acclaimed Socio-Economic Assessment Toolbox (SEAT), and healthcare through our leading workplace health and wellness programmes to combat HIV/Aids and TB.

Recent initiatives in countries, such as Brazil, Chile and South Africa, are helping to build municipalities’ capacity to deliver improved services to their citizens. Other initiatives support partner-led interventions to strengthen community healthcare in underserved areas, particularly in South Africa and Brazil.

We seek to improve the health of developing nations, which host approximately 85 per cent of our operations, through our support of the Global Alliances for Vaccines and Immunisations (GAVI) and the Global Fund to Fight Aids, TB and Malaria, where we have pledged $6 million over three years.

What is your role as chairman and what’s the role of the board in making companies more accountable to their stakeholders?

We’re taking a leading role in promoting greater accountability and transparency in the mining sector. We’re driving a debate around certification, currently taking place within the industry, which aims to ensure that mining products are seen to have been sourced responsibly. We believe it is both necessary and beneficial to work responsively with concerned stakeholders to achieve this.

At the same time as seeking to push the boundaries, we remain firm supporters of existing initiatives such as the Extractives Industry Transparency Initiative, the UN Global Compact, the Voluntary Principles on Security and Human Rights, and contribute to sustainability in mining through our involvement in the International Council on Metals and Minerals.

The board is the custodian of good governance and the steward of company values; as such, it is responsible for ensuring an organisation acts at all times and in all places with consistency, integrity and high ethical standards.

Our board Safety and Sustainable Development (S&SD) Committee scrutinises all aspects of our sustainability performance. In recent years, the committee has invited our NGO partners, and other third parties with S&SD expertise, to offer their evaluation and advice on key issues. In 2012, the committee welcomed presentations from CARE International on its health and education work in partnership with Anglo American.