Online Course CSR in Mining for Sustainability

CSR in Mining

1. CSR in Mining June 5, 2020 A webinar organized by Center for Human Resources Development of Geology, Minerals and Coal (PPSDM Geominerba ) Presented by Dede Abdul Hasyir Bio: Lecturer in Social and Environmental Accounting course at Universitas Padjadjaran . A Certified Sustainability Practitioner (CSP). Former CSR consultant for PT Aneka Tambang Tbk in 2014. Researcher for ESIA (environmental and social impact assessment) in the development of Upper Cisokan Hydropower Plant in West Bandung and Cianjur Regency, a project funded by the World Bank .

2. Overall Webinar Agenda Business process of mining company Description about CSR concept and issues Stakeholder mapping CSR program formulation CSR implementation CSR monitoring and evaluation ( monev ) CSR reporting Case study on one of CSR program

3. Mining is the process of extracting minerals like gold, silver, copper, nickel and uranium (metallic) and salt, potash, coal and oil (nonmetallic) formations that concentrate naturally in the earth. What is mining?

4. Two types of mining methods : Surface Mining : 1. Alluvial mining 2. Open-cast mining Underground mining

5. A m e th o d o f e x tra c t i ng minerals by dredging alluvial deposits. Pan and Batea Dredging Sluicing Rocker

6. Open cast mining refers to a method of extracting rock or minerals from the earth by their removal from an open pit.

7. Underground mining is a technique used to extract ores and valuable minerals beneath the earth’s subsurface.

8. How does mining business operate?

9. 5 Detailed Business Cycle in Mining Industry Indonesian version: Exploration and Feasibility study Design and Construction Exploitation Production and distribution Mine closure and post mining Other view point: Exploration Mine-site design and planning Construction Production Closure and reclamation

10. Exploration Exploration is a study dedicated to “confirm” whether geological figures such as data of potential minerals in certain area is proven or not. It is carried out through a research examining several samples or indicators that leads to a conclusion regarding to the actual reserve of certain minerals, and also oil and gas.

11. Feasibility Study If the result of exploration confirms the preliminary geological data, the stage moves to feasibility study. In this study, the mining company plan all details of mining activities. Mainly, it is dedicated to find out the economies of scale of the production. There will be calculation about NPVs, Payback Period, Internal Rate of Return, Break Even Analysis and other relevant measures. It involves SWOT analysis and assessment on social and environmental impact.

12. Design and construction The process of constructing a mining facility and the infrastructure to support the facility It is also known as mine development Mine development may involve many activities such as: The preparation of the mine site by clearing trees and blasting rock The construction of mining facilities such as head frames, administration buildings or mechanical shops The creation of infrastructure such as power lines and substations, roads or water lines

13. Design and construction Clearing trees Blasting

14. Design and construction Construction of mining facilities

15. Design and construction Creation of infrastructure

16. Production Stage Production can be dedicated to: Process the ore for selling purpose Converting ore into other semi or final product

17. Post-Mining Stage

18. Let’s stop here Please identify any social and environmental impacts from every stage of mining business!

19. Social and Environmental Impact on Mining Activities

20. From the exploration stage Impact of exploration on the societies and the environment: Land disturbance A certain scale of solid, liquid and gas pollution Noise Disturbance on heritage asset, indigenous people and biodiversity Social and Environmental Impacts

21. Social and Environmental Impacts From the exploitation, production and distribution phase, mining industry creates both positive and negative impacts on the society and natural environment.

22. Prof. Dr. H.Z. Harraz Presentation The Mining Cycle 24

23. Prof. Dr. H.Z. Harraz Presentation The Mining Cycle 25

24. Prof. Dr. H.Z. Harraz Presentation The Mining Cycle 26

25. Prof. Dr. H.Z. Harraz Presentation The Mining Cycle 27

26. Social and Environmental Impacts In the post-mining stage, all of negative impact will be recovered through the process of: Rehabilitation Reclamation Restoration

27. Land Rehabilitation

28. Land restoration

29. Social and environmental impact arising from mining business Land acquisition Land use and land restrictions Livelihood of local community Pollution Water resources

30. Abandoned mining site after exploitation ended

31. CSR in Mining Is CSR important in mining business?

32. Business and society Businesses are part of societies (locally, nationally, globally) therefore have a duty to act within their expectations and norms. By doing so they are able to operate successfully without harming the societies, communities and environments in which they operate. Enterprise and its Business Environment © Goodfellow Publishers 2016

33. CSR in Mining CSR in mining can be defined as a socially and environmentally responsible practices of mining business It involves: A responsible use of land, water, and other natural resources A controlled waste management both from refinery process of materials and production process A high compliance on government rules A good business code of conduct A good management of stakeholders relationship Finally, a high concern on sustainable development

34. CSR and Sustainable Development CSR can be seen as the way firms balance environmental, social, and economic aspects, trying to be transparent and accountable and establishing better practices to create wealth and improve the society . To be social responsible, enterprises “should have in place a process to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders”. CSR is expected to be a contribution of private sectors (companies) to the achievement of sustainable development (SD). SD is development that meets current generation’s needs without compromising the ability of future generation in fulfilling their needs .

35. What or who are the stakeholders? Stakeholders are parties that influence the operation of a business, or those who are being influenced by company’s operation. It includes: Suppliers, contractors, and sub-contractors Customers Local community And last but not least: the silent stakeholder, i.e the natural environment

36. What kind of CSR program for external stakeholders of mining company? Conflict often occurs when there is a gap between the mining company and its society The gap is caused by: Economic aspect Education aspect Social class, and etc.

37. What kind of CSR program for external stakeholders of mining company? The program is often called as: Community development Community empowerment

38. What do we need to conduct an effective com-dev program? Com-dev program is initially formulated through an understanding process of society’s situation. This is called as social mapping, or stakeholder mapping.

39. What do we do in a stakeholder mapping This study is dedicated to understand: Social condition of a society surrounding the mining company Potential economy of local people Identification of social mover, social entrepreneur and local hero

40. After conducting stakeholder mapping, what’s next? Formulation of CSR / com-dev plan that can be long, middle, and short term Creating planning document such as master plan, action plan and annual plan and its performance indicators. Creating com-dev program and activities and its budget Implement the program

41. Com- dev implementation In company’s organization structure, CSR or com-dev is usually assigned and executed by either: Corporate secretary, PR department CSR division, Com-dev division HR division, HSE division These departments formulate programs and activities in a certain period They also develop teams to implement the programs

42. Com- dev implementation

43. Type of Com-dev Program Local infrastructure Education Health and sanitation Agriculture Fishery

44. Partners in Com-dev Program Local governments Local people Local suppliers Local, national and international NGOs CSR consultants Other firms

45. How would we measure the effectiveness of the program? After executing the com-dev, we need to do the monitoring and evaluation Monitoring is dedicated to find out whether the actual program match the planned program Evaluation is designated to determine the effectiveness of the program which is carried out through an impact analysis (we will learn about SROI in this training)

46. CSR reporting Disclosure on financial statements Annual report Sustainability report Integrated report

47. CASE STUDY Kaltim Prima Coal A coal mining company operated in East Kalimantan

48. VISION To become a partner in sustainable development in improving the quality of life of the community Mantain the local values by preseving the culture and enviroment Build and maintain good relationships with the stakeholders based on mutual trust and respect Promote local economic development to achieve self sustaining community Mission - 2 Mission - 1 Mission - 3 Agribusiness Education & training Infrastructure improvement Capacity building Health & sanitation SMEs development Conservancy of culture/nature

49. 2010 - 15 Mining 50% Non-mining 50% Study implementation Agribusiness development Land utilization for agriculture 2015 - 20 Mining 35% Non-mining 65% Continuous development of agriculture Services improvement Agro-industrial technology development 2005 - 10 Mining 65% Non-mining 35% Base line study Intensive t raining Studies in agriculture, fishery, animal husbandry, plantation, forestry Land identification Spatial planning Potential analysis Land rehabilitation 2020 - 25 Non-mining 95% Development of agro- industr y Services improvement Agribusiness export development Mining 5% KPC Mine Closure Plan

50. Community development coverage area

51. Tepian Langsat, Meratak, Tepian Indah Muara Bengalon, Tepian Baru Sekerat, Segading/keraitan, Sepaso Timur, Sepaso Selatan, Sepaso Barat, Sepaso Induk, Tebangan Lembak, Teluk Lingga, Sengata, Utara, Singa Gembara, Swargabara, Rantau Makmur, Mukti Jaya Singa Geweh, Sangkima, Margo Mulyo Teluk Pandan, Manunggal Jaya, Kebon Agung, Pulung Sari, Tepian Makmur, Pulung Sari, Tanjung Labu RING 1 : North Sengata Bengalon Rantau Pulung South Sengata RING 2 : Kutim (Outside Area of Ring-1) RING 3 : East Kalimantan RING 4 : National-wide First Second Third Priority Areas of Comdev Program

52. End of Presentation Hope that you enjoy the session Thank you very much