RELATED SUSTAINABILITY PRINCIPLES
- PRIORITISING ENVIRONMENTAL PROTECTION
- Optimising socio-economic benefit
- Prioritising the development and well-being of our employees
A SNAPSHOT OF OUR PERFORMANCE
- US$0.8 million invested in social projects (2018: US$0.8 million)
- US$164.6 million spent on local procurement (2018: US$159.3 million).
- Zero major or significant community incidents (2018: Zero).
Related UN SDGs
For more information on our approach to integrating the 17 SDGs into our business operations, please see our UN SDG Framework (Working towards global goals).
- Ensuring that our corporate social investments create sustainable value beyond the life of our mines.
- Balancing growing stakeholder expectations with our continued drive to reduce costs and enhance operational efficiencies.
- Extending our engagement strategies to encourage enhanced communication and transparency between our operations and our communities.
- Continually enhancing communication and stakeholder engagement strategies.
- Ensuring continued partnership with our project-affected communities (PACs) to support the creation of lasting mutual benefit.
- We have decided to adopt rolling five-year CSI cycles, beginning with a full “needs analysis” in 2020.
Our operations are located in remote areas where weather can be extreme, transport routes remain a challenge and access to basic infrastructure can hamper development. While these circumstances pose significant operational challenges, they can also threaten the health and well-being of the communities surrounding our operations.
In addition to the challenges faced by community members as a result of their natural and built environment, it is our responsibility to guard our communities against potential risks posed by our operations. For example, tailings storage dams, while an integral part of mining, also present one of the most significant potential hazards associated with the industry. Recent tragedies involving tailings dam failures have placed the mining industry under intense scrutiny, highlighting that risk management is crucial at every stage of the lifecycle of our tailings facilities .
In response to these tragedies, a global review into the safety of tailings dams was announced and co-convened by the International Council of Mining and Metals (ICMM), the Principles for Responsible Investment (PRI) and the United Nations Environment Programme (UNEP ).
The ICMM announced in February 2019 that it would establish an independent panel of experts to develop an international standard for tailings facilities for its member companies. The standard would be informed by a review of current global best practices in the mining industry and beyond.
Public consultation on the standard was concluded by 31 December 2019, and the deliberations are expected to be finalised in 2020.
Furthermore, during the year, the Church of England and the Swedish government sent out questionnaires and monitors to the mining stocks in which they were invested to ascertain their level of dam-safety preparedness. We were thanked for our response and invited to present at a symposium on dam safety in London in 2020.
We contribute to the safety and security of our communities in a number of ways, including emergency medical care and road accident response for incidents near the mine. The mine also undertakes maintenance of roads, clearing snow and assisting with the removal of vehicles that are blocking access, thereby ensuring safer road conditions for our PACs. Furthermore, our Letšeng mine is available to communities as a safe haven during extreme weather conditions and medical assistance is also provided to members of our PACs at our Ghaghoo mine.
We recognise that ensuring the integrity of our mining waste and fresh-water storage facilities is yet another way that we safeguard our communities. We take a proactive approach and ensure that dam safety is continually managed according to international best practice. Dam walls undergo stringent safety monitoring in the form of inspections and audits, which are conducted both internally and externally at regular intervals throughout the year. The findings and recommendations stemming from these investigations and audits are reported to the appropriate HSSE Sub-Committees and Boards.
To protect our host communities from potential dam-related hazards, we monitor three facilities at our Letšeng mine: the Patiseng tailings storage facility (TSF), the Old TSF, and the Mothusi Dam – our fresh-water-supply resource. All facilities undergo stringent inspections on a daily, weekly and monthly basis, surveying various factors such as water level, beach length, freeboard and overall structural stability. Furthermore, an early-warning system, together with community training and awareness programmes, are used to ensure the emergency readiness of communities that could be affected in the unlikely event of a failure.
To ensure the structural integrity of our Ghaghoo facilities, we undertake annual internal inspections on the dams and regular external inspections.
- Zero incidents of compromised dam integrity were recorded in 2019 (2018: Zero).
- In 2019, the Letšeng emergency team responded to 24 emergency calls, of which 33% were motor-vehicle-accident related. (2018: 20 emergency calls)
Lesotho is classified by the World Bank as a lower-middle-income country with high levels of unemployment, inequality and poverty. We recognise that in this context we have a significant responsibility to contribute positively and sustainably to our PACs, even beyond the life of the mine, and believe that it is only through meaningful engagement that this can be achieved.
Along with excellent social, economic and environmental practice, engagement is the primary means of maintaining our social license to operate.
Acknowledging the unique cultural and traditional context of our communities is essential, and we aim to engage transparently and respectfully. We have, therefore, appointed suitably qualified and trained employees to ensure this transpires. Furthermore, our operations have a framework for stakeholder consultation in place to ensure that regular, meaningful engagement occurs. We integrate the feedback from these engagements in our decision-making at operational and Group level.
Our approach to community engagement is informed by our operation-specific social and environmental impact assessments (SEIAs) and community need analyses. The SEIAs and community needs analysis are informed by extensive public participation, host country legislation and international best practice guidelines such as the World Bank Equator Principles and the International Finance Corporation’s Performance Standards on Environmental and Social Performance.
The Letšeng community programmes are more advanced with a greater level of engagement than those at Ghaghoo. This is partly as a result of the maturity of the Letšeng mine, which has been in operation for many years. The level of community engagement has also been impacted by the decision to place the Ghaghoo mine on care and maintenance, which resulted in significant scaling back of all investments connected with the mine. During 2019, however, we continued to engage meaningfully with the PACs surrounding the Ghaghoo mine with regard to community-related issues through on-site employees.
At Letšeng, PACs have elected community representatives who communicate with the Corporate Social Investment (CSI) department to create a sustainable and culturally effective link between communities and the mine. The community representatives sit on the CSI sub-committee of the Letšeng Board, which meets quarterly. These meetings include discussions on the employment of PAC members and the effectiveness of current CSI projects. During 2019, a community needs analysis will be conducted to inform our approach to current and future community development projects.
- No major or significant stakeholder incidents occurred at any of our operations (2018: none).
- Meaningful, proactive engagement with PACs continued during the year.
- There were also no incidents involving any violation of the rights of the indigenous people on whose land the Group operates (2018: none).
- Potable water was provided to the community of the Central Kalahari Game Reserve (CKGR) near the Ghaghoo mine, as well as to communities and schools near the Letšeng mine due to the severity of the drought.
Operating in remote, rural locations, we recognise the critical challenge of ensuring that our operations do not threaten the well-established cultures and social structures in the communities surrounding our mines. Rather, we believe it is our duty to support the upliftment of these communities and their economic and social potential.
We apply an informed approach to our community engagements and interventions, using information gleaned from community needs analyses and SEIAs, in line with international best practice.
These assessments include extensive public participation to ensure we understand the surrounding communities and their concerns and to minimise adverse impacts while also identifying opportunities for positive outcomes.
Our SEIAs involve biodiversity surveys; soil, water and air-quality studies; archaeological surveys; visual and socio-economic impact assessments; and an extensive public-participation process.
- Zero incidents involving the violation of the rights of indigenous communities occurred (2018: none).
- Continued engagement with project-affected communities through established forums at Letšeng.
- Zero major or significant community grievances were lodged (2018: none).
Diamonds and the textile industry make up almost the entire export economy of Lesotho, a country of about two million citizens. While these industries are growing, they are still in the early stages of development. Lesotho itself is a developing country with high rates of poverty; ranking 159th out of 189 countries on the United Nations’ Human Development Index. The three districts bordering the Letšeng mine are some of the most impoverished in Lesotho.
We contribute significantly to our host countries in the form of taxes and royalties. In addition, we further safeguard our social licence to operate through direct investment in the sustainable development of our host communities. This begins with understanding our communities’ needs.
Ensuring mutually beneficial relationships with our PACs is central to the long-term sustainability of our business. We aim to keep abreast of compliance and legal requirements while moving beyond these, striving to make a meaningful impact and meeting the needs of our host communities.Our recently signed mining lease agreement with the Lesotho government stipulates a minimum amount – L5 million – to be spent on CSI activities each year from 2020. To ensure this investment results in tangible, sustainable impact for our host communities, we believe that a long-term strategic approach must be applied.
While our flagship project model has prefigured this long-term planning by endeavouring to take projects from conception to handover, with the increased investment comes the possibility of multiple flagship projects per year and an expanded geographical footprint, resulting in increased complexity.
Taking this into consideration, we have decided to adopt rolling five-year CSI cycles, beginning with a full needs analysis in 2020. This will involve an extensive consultation process with communities and community leadership to ensure that community priorities and Gem Diamonds’ initiatives are best aligned.
The five-year CSI cycles will build on Gem Diamonds' years-long experience investing in and supporting education, health, infrastructural and enterprise-development initiatives. They will also support and be informed by the rolling three-year cycles of integration of the United Nation Sustainable Development Goals (UN SDGs) throughout our organisation in our endeavour to contribute to the achievement of these goals (see here for more information on our UN SDG framework).
The five-year cycles will not entail any diminished support for Gem Diamonds' existing CSI projects. The progress of both the dairy project and Lesotho Legend project have, however, been hampered by delays in the implementation of the Lesotho Highlands Water Project – an initiative of the Lesotho Highlands Development Authority. This large-scale state infrastructure project was anticipated to drive baseline demand for the produce derived from both projects, and was considered key to their sustainability. The delays, though problematic, do coincide with the switch to five-year cycles, and can therefore more easily be incorporated in the new funding regime. The Lesotho Legend project in particular will see enhanced support as a result.
For an update on the existing projects, see our case study here.
Notwithstanding the decision to place Ghaghoo on care and maintenance, we have continued to engage with our communities to secure the future sustainability of projects we have contributed to since the inception of the mine. Due to the status of the Ghaghoo mine however, CSI expenditure is limited to maintaining current investments or developing sustainable exit strategies for projects we are no longer able to support.
In addition to the projects at mining operations, our technical and administrative offices also supported projects of value to local communities.
- Invested US$0.8 million in CSI projects (2018: US$0.8 million).
|Community investments by Gem Diamonds (US$ million)|
Given the remote locations of our operations and the limited employment available for our PACs, we value localisation as a critical strategy to create shared value for our communities. By employing members of our PACs or by engaging local businesses in our supply chain, we can make a significant positive contribution to our communities while meeting the needs of our business.
Outside of our corporate social investment, we strive to make a difference to local economies by employing members of our PACs. Where our operations are able to match available skills with on-site requirements, we recruit locally.
Furthermore, we strive to create sustainable socio-economic growth in the areas in which we operate by optimising local procurement. In this endeavour, we remain mindful of ensuring that all goods and services procured locally comply with necessary standards, and support local suppliers in meeting these requirements where appropriate.
Total in-country procurement by the Group during 2019 amounted to US$164.6 million (2018: US$159.3 million). In-country procurement at Letšeng amounted to US$161.9 million in 2019 (2018: US$152.3 million). Letšeng also reports on PAC and regional procurement to show the extent of shared value created. During 2019 US$2.4 million (2018: US$2.1 million) was allocated to procurement from PACs. An additional US$30.9 million in goods and services was procured from regional communities around Letšeng from US$32.3 million in 2018.
- 98% of the Letšeng workforce comprised Basotho nationals (2018: 98%).
- Group in-country procurement totalled US$164.4 million (2018: US$159.3 million).
- Letšeng regional procurement totalled US$30.9 million (2018: US$32.2 million).