Task 1 - Define and plan

Contents in this section:

Screen for social materiality

Criteria for socially material contracts should be established and included in the site’s procurement procedures. The objective of establishing criteria for social materiality is to screen whether the draft scope of work includes potential social and human rights impacts and risks that need to be managed. The criteria should be appropriate to the local site and community context: what is socially material for one site may not be socially material for another. For example, socially material criteria could include one or more of the following elements:

procurement categories with high potential social and human rights impacts and risks, such as construction contracts (including EPCM), transportation, security
size of the workforce
workforce requiring accommodation
financial value of the contract
duration of the contract
potential for significant numbers of non-local workers
potential for local recruitment
potential for local contracting
work activities that require engagement with communities and other local stakeholders
work activities that could cause damage to private property or limit public access
whether the work is to be performed inside or outside the site’s Area of Influence

Assessing whether a scope of work is socially material is typically conducted using a checklist of socially material criteria, developed with or by the Social Performance Manager.

If a scope of work is not deemed socially material, only the minimum requirements (see Box 4B.1) should be included in the contract. No additional due diligence on the contractor in terms of social performance is required, no tender questions specific to social performance need to be included, and the contractor is not required to develop a CSMP.

If a scope of work is socially material, the guidance outlined in the rest of this section must be followed.

Assess potential social and human rights impacts and risks

An assessment of potential social and human rights impacts and risks associated with the scope of work should be conducted by the social performance team in conjunction with the requestor, using SHIRA (see Section 3C). Table 4B.1 provides an overview of typical contractor-related risks and impacts.

The site should also think about whether and how the scope of work can support the local socio-economic benefit delivery strategy in terms of local procurement. Guidance on this is provided in Section 4A on Socio-Economic Development.

Table 4B.1 Examples of potential social and human rights impacts and risks associated with contractors

Impact and risk category	Examples of potential impacts	Description of potential impact	Contracts and scopes of work typically associated with potential impact
Community health and safety	Increase in HIV/AIDS and other sexually transmitted infections, and increase in prostitution, because of (contractor) workforce	The employment of (contractor) workers who live without their families or away from their home can result in casual sexual relations, including relations with commercial sex workers. Such behaviour increases the risk and incidence of transmission of communicable diseases such as HIV and other sexually transmitted infections.	Contracts with a large non-local workforce Long-haul transportation contractors
Community health and safety Personal and political security Socio-cultural networks	Sexual exploitation and abuse	Contractor workers who live without their families or away from their social network may engage in casual sexual relations with members of the local community and may create increased demand for commercial sex workers. This may lead to an increase in the number of people engaging in prostitution. Young girls and women may also be tempted to engage in sexual relationships to attract workers with money. This can lead to various indirect impacts including unwanted pregnancies and increased risk of impoverishment for single mothers, increased school drop-out rates for young girls, and family breakdown.	Contracts with a large non-local workforce
Community health and safety	Inadequate housing conditions provided to contractor workers	When a contractor needs to provide accommodation for its workers, such accommodation should safeguard the health and safety of the workers and provide adequate and sanitary living conditions and appropriate leisure and health facilities.	Contracts requiring worker accommodation
Community health and safety Economic	Negative environmental impacts on communities (water quality, water quantity, hazardous material spills, dust, noise, vibration) impacting on community health and safety and/or livelihoods	Various contractor activities can negatively impact on the environment, which in turn can affect local communities. For example, blasting can cause nuisances in terms of noise; exploration drilling contractors can pollute private landowners’ land; heavy contractor traffic on public roads can increase dust; incorrect disposal of waste can pollute ground and surface water; and incidents involving hazardous materials spills can impact on community health and safety.	Blasting contractors Transport contractors Drilling contractors Hazardous-materials-handling contractors
Community health and safety	Increase in traffic in local communities, increased risk of collisions	Contractor transportation services (including worker/personnel transportation) using public roads can significantly increase traffic in local communities and negatively affect community health and safety in relation to accidents, noise, and dust generation.	Transportation services (including personnel transport) Product transport (i.e. concentrate trucking)
Personal and political security Reputational risk to the business	(Perception of) lack of fairness and transparency in the contracting and/ or recruitment processes used by the contractor	Tension and/or conflict can result from resentment by local residents if they perceive that contractors have hired non-locals or expatriates into jobs for which locals are/perceive themselves to be qualified. Resentment from local residents can also result from contractors hiring a local workforce, with only some individuals/groups benefiting and others not.	Contracts with a large non-local workforce Contracts requiring significant recruitment and procurement
Personal and political security	Human rights infringements by security contractors	Security service providers can infringe on the human rights of community members or other external stakeholders. These risks are outlined in more detail in the Security Section (4E).	Security service providers
Personal and political security	Labour rights infringements of contractor workers	Labour rights infringements can include unfair dismissals, withholding of wages, denial of freedom of association or collective bargaining, unfair or discriminatory terms and conditions of employment, use of child or forced labour, withholding of passports and other documents for identification, unsafe or unhealthy working conditions or accommodation, etc.	All contractors
Infrastructure and services	Lack of availability and affordability of housing for local residents	Sometimes a contractor needs to provide accommodation for its workers outside the mine area. Options typically considered are a worker camp (such as when there is a large, foreign workforce on a temporary construction contract) or the integration of workers into local settlements (such as when there is a moderate-sized workforce on a long-term operational contract). Each of these options has its own range of positive and negative impacts. Generally, it is easier to control and provide for a large, temporary workforce if it is housed on site in a purpose-built accommodation camp. However, this can result in dissatisfaction among local communities, who may feel alienated and who may be unable to see any tangible economic benefits for the community from the workers' presence. On the other hand, provision of housing within local settlements carries its own risks, such as increased pressure on local infrastructure and services, potential for cultural and religious insensitivity, increased sexual relations with local residents and associated spread of communicable diseases, and increase in other social ills. Decisions around which option is most suitable should be dictated by the following: size of the workforce ability of the local settlements to absorb the workforce cultural or ethnic background of the contractor workforce compared with that of local residents isolation of the project area proportion of local residents in the workforces transport options to and from site whether it is a short-term (construction) workforce or a longer-term (operations) workforce.	Contracts requiring worker accommodation
Infrastructure and services	Damage to private property	Certain contractor activities could result in the contractor accidentally damaging the private property of external stakeholders. For example, exploration drilling contractors could unintentionally damage access gates of private landowners, or vibrations caused by heavy contractor vehicles could damage houses located along the public-transportation road.	Exploration drilling contractors Transport contractors Any work conducted outside of mine area
Socio-cultural networks	Increase in crime rates, social ills, and resentment among the local population as a result of demobilisation of a large non-local contractor workforce	Sometimes non-local, demobilised contractor workers do not leave the local communities after they have been demobilised. Impacts linked to demobilisation can include an increase in resentment [by]/of the local population and an increase in crime rates and social ills.	Contracts that require demobilisation of a large workforce
Socio-cultural networks	Increased skills and training opportunities in the local area	Anglo American provides numerous opportunities for contractor employees to improve their skills and experience, thereby enhancing their employability. This can include training courses for contractors on required health, safety and environmental standards.	Contracts requiring a large workforce
Socio-cultural networks	Rude or inconsiderate behaviour of contractor workers towards local residents	ESIA contractors, exploration drilling contractors, contractors that have a temporary office in the local communities, and contractor non-local workers that live in worker accommodation typically interact with local community members on a regular basis. There is a risk that, in this interaction, contractor workers are (perceived as) rude, disrespectful, or inconsiderate, especially if not familiar with local customs.	ESIA contractors Exploration drilling contractors Contractors that have temporary offices in local communities Contractors with a non-local workforce living in worker accommodation
Economic	Increased local employment	One of the key potential benefits of mining is increased local employment; the extent of these benefits can be limited, however, by the lack of suitable skills at the local level.	Contracts requiring a large workforce
Economic	Increased demand for local goods and services	National and local businesses can benefit from procurement opportunities for goods and services with Anglo American sites. Large Anglo American contractors typically contract parts of their work out to smaller contractors, which local service providers may be able to benefit from.	Contracts with a high financial value Contracts requiring a large workforce Contracts with work packages that can be contracted to local suppliers
Economic	Decreased or limited access to land used for livelihood activities	Implementation of contracts that require the construction of infrastructure outside the mine area can result in (temporary) limitations in accessing land areas owing to imposed restrictions on movement or access.	Contracts that require the upgrading or construction of infrastructure outside the mine area
Reputational risk to the business	Raised/unrealistic local community expectations because of contractor commitments	When contractors (such as ESIA contractors) interact with community members or other external stakeholders on behalf of Anglo American, there is a risk that they make commitments (for example, about available job opportunities) which Anglo American is not able to fulfil, resulting in frustrated community members.	ESIA contractors Exploration drilling contractors Contractors that have temporary offices in local communities Contractors with a non-local workforce living in worker accommodation
Cultural heritage	Damage to cultural heritage	Certain contractor scopes of work can impact on cultural heritage; for example, because of an unexpected chance find during drilling or digging activities, or by damaging previously identified cultural heritage sites on or near the mine site.	Exploration drilling contractors Earthwork contractors Construction contractors

Prepare the tender documentation

The purpose of the tender process is to select the most suitable contractor to implement the scope of work and who can successfully manage the potential social and human rights impacts and risks associated with it.

The site’s social performance team should work with the site’s supply chain team to ensure that appropriate and specific social performance objectives, targets related to social performance and minimum social performance controls, standards or requirements are included in the tender documentation. The tender documentation should also include relevant background information about the Area of Influence that helps highlight and contextualise social performance issues.

The information in the tender documentation should be tailored to the scope of work. The more generic the tender documentation is in terms of social performance expectations and requirements, the more difficult it is for the contractor to understand what is expected, appropriately price its proposal, allocate sufficient financial and human resources, and demonstrate their experience in meeting the requirements. Merely including the Anglo American Social Way Policy and Guidelines as part of the tender documentation does not provide sufficiently detailed information for the contractor to understand the social objectives and requirements specific to the scope of work.

The tender documentation and scope of work should therefore clarify social performance expectations, including compliance with relevant Social Way requirements. This can be done by setting social performance objectives, binding contractor-performance targets and minimum controls the contractor must implement, if these exist. Examples of controls for potential social and human rights impacts and risks related to contractor activities can be found in Table 4B.2.The contractor should be asked to provide implementation plans explaining how it aims to achieve the objectives and targets set, which must be approved by the site before the work commences.

Where an EPCM contractor is being sourced, a comprehensive document detailing their approach to social performance should be provided by the contractor, which includes a description of how social performance requirements are cascaded to the EPCM sub-contractors and monitored. The document forms part of the tender documentation (and will form part of the final contract) and spells out in detail the requirements to manage potential social and human rights impacts and risks, including clear definitions of responsibilities, an overview of applicable standards and legislation, social performance training needs, social performance measurement tools, contractor performance monitoring, requirements to have suitably experienced contractor social performance staff, and reporting requirements.

Box 4B.2 includes examples of information that should be included in tender documentation, depending on scope and associated risks and impacts.

4B.2 Guidance

4B.2 Guidance