Box 3C.1 International standards

IFC PS 1

“The [site] will establish and maintain a process for identifying the environmental and social risks and impacts of the [site]. The type, scale, and location of the [site] guide the scope and level of effort devoted to the risks and impacts identification process.”

UNGPs

“In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence. The process should include assessing actual and potential human rights impacts, integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed.”

This section provides guidance on identifying, prioritising and managing adverse social and human rights impacts and risks.

Under the Social Way, ‘impacts’ are defined as changes to the lives, livelihoods, cultural heritage, health or well-being of external stakeholders directly or indirectly caused by a site. ‘Risks’ are defined as financial, legal, or reputational threats to the business (see Box 3C.2). Risks and impacts may be related; for example: communities may block a site’s access road in response to damage to their houses due to a fly-rock from a site’s blasting. In this example, damage to the community members’ houses is an adverse impact, while lost production caused by the road blockage is a risk to the business. Management measures and critical controls should be in place to avoid both risks and impacts where possible, and both risks and impacts should be included in the site’s Baseline Workplace Risk Assessment and Control (WRAC). 

This section is aligned with both the International Finance Corporation (IFC) Performance Standards (IFC PS) and the United Nations Guiding Principles on Business and Human Rights (UNGPs). Every Anglo American site is required to undertake an annual baseline risk assessment in accordance with the requirements of the Anglo American Integrated Risk Management Policy and Operational Risk Standard. The assessment of Social and Human Rights Impacts and Risks (SHIRA) forms part of the (Operational Risk Management) ORM process. This requirement applies across all stages of the asset lifecycle.

Specifically, this section:

• outlines an integrated process that enables sites to identify the full range of potential adverse impacts (on external stakeholders) and risks (to the business)
• provides clarity on adopting a human rights approach to impact identification and management
• offers guidance on developing and embedding controls to prevent or mitigate potential impacts and risks
• describes the roles and responsibilities of different functions, and details the cross-departmental co-ordination and collaboration required to identify and manage potential social and human rights impacts and risks
• integrates social and human rights impacts, risks and opportunities management into the site-level Set Service Strategy, as part of the Anglo American Operating Model.

Box 3C.2 Impacts vs risks

Impacts

• Under the Social Way, ‘impacts’ are defined as changes to the lives, livelihoods, health or well-being of external stakeholders directly or indirectly caused by a site.
• Impacts can be positive or negative. SHIRA is focused on identifying potential negative impacts.
• Impacts can be cumulative. Cumulative impacts are the combined effects of multiple projects/activities in an area. SHIRA requires sites to assess potential cumulative impacts.
• Adverse impacts should be avoided.

Risks

• ‘Risks’ are defined as financial, legal, or reputational threats to the business.
• Risks can arise from impacts and site risk registers should reflect this linkage.
• The actualisation of a risk should be avoided.

Intended users

The intended users of this section are primarily the Social Performance teams, who have the lead responsibility for developing SHIRA and for following the guidance set out in this section. SHIRA, however, is a collaborative process: potential adverse social and human rights impacts can stem from a variety of sources, and multiple departments have a role to play in designing and implementing prevention and control measures. The most significant departments in this regard are typically: Human Resources, Security, Supply Chain, Legal, and Safety and Sustainable Development (S&SD).

This section also outlines an important role for Risk Managers. Risk Managers provide the link to sites’ ORM process and have the necessary expertise to assist Social Performance teams and other departments in identifying potential social and human rights impacts and risks and in developing and monitoring (Critical) Controls.

Relevance to other sections

SHIRA is pivotal to Social Way implementation and supports the following sections:

• Governance (Section 1)
  • SHIRA requires both resources and skills. Section 1 details the capacity and expertise that social performance teams should have and provides information on training to support skills development. Section 1 also emphasises a collaborative and cross-departmental approach to social performance, including in relation to identifying and managing potential social and human rights impacts and risks. The Social Performance Management Committee (SPMC) is designed to promote consistency and co-ordination across sites and ensure a comprehensive understanding of potential adverse social and human rights impacts and risks.
• Review and planning (Section 2):
  • The baseline assessment and context review outlines in this section provide the basic data and analysis essential to understanding a site’s actual and potential social and human rights impacts and risks. Further, the potential social and human rights impacts and risks captured in SHIRA should directly inform the site’s Social Management Plan (SMP).
• Engagement and Analysis (Section 3)
  1. Stakeholder Engagement (3A) – stakeholder engagement is often an effective mitigation measure. Consultation also informs potential social and human rights impact identification, shapes appropriate responses and promotes trust and confidence.
  2. Social Incident and Grievance Management (3B) – incident and grievance management provides Social Performance teams (and others) with invaluable information and insights. Grievances can be an indication of impacts and can be a useful indicator of the effectiveness of mitigation measures.
• Impact and Risk Prevention and Management (Section 4)
  • SHIRA defines the potential social and human rights impacts and risks that sites need to address. This section provides guidance on an extensive, but not exhaustive, list of impacts and management approaches commonly encountered. The assessment of potential social and human rights impacts and risks undertaken following the guidance in these sections is part of the SHIRA process. The findings should be incorporated into the site’s Baseline WRAC, SMP and issue specific management plans, as appropriate.
  • The mitigation of potential social and human rights impacts and risks may include the development and implementation of socio-economic development (SED) projects. Section 4 is focused on the identification of potential positive impacts a site may have on local communities, and on maximising these positive impacts through SED interventions (4A). While SED programming is not exclusively based on risk and impact mitigation, in many cases the most effective risk- and impact-mitigation measures entail long-term development support and capacity-building. SED programmes should therefore be informed by an analysis of potential social and human rights impacts and risks.

Frequency and timing

Potential social and human rights impacts and risks are reviewed and updated at least annually as part of the baseline risk assessment required under ORM, informed by the site’s internal and external context (see Section 2), stakeholder engagement processes (see Section 3A) and by its incidents and grievances (see Section 3B). Potential social and human rights impacts and risks form part of the site’s Baseline WRAC. Findings from issue specific assessments done under the sections on Impact and Risk Prevention and Management (Section 4) should be incorporated into the Baseline WRAC as and when appropriate, noting that these updates may not fall within the same timeframe as the site’s annual baseline risk assessment process. The assessment or management of potential social and human rights impacts and risks may also need to be updated more frequently (as necessary) as a result of Learning from Incidents findings, significant changes to operational plans and/or external context, etc.