Contractor activities can have negative impacts on and damage Anglo American’s relationship with local communities and other stakeholders. This section focuses on the identification of such potential social and human rights impacts and risks, and actions to be taken within the contractor management process to prevent, mitigate and manage these. Opportunities for benefit creation through contractor activities also exist, which is further explained in Section 4A on Socio-Economic Development.

The guidance provided in this section applies to complex contracts, such as those for EPCMs, and to more straightforward scopes of work, such as for transportation contractors. The key principle underpinning the approach to contractor social management is to ensure that it is commensurate with the level of potential social and human rights impacts and risks (and opportunities) that relate to a contractor’s activities.

Once it is determined that a contract is socially material, the potential social and human rights impacts and risks associated with the contract need to be assessed so that appropriate controls and other requirements can be established. It is essential that the tender documentation provides sufficiently detailed information about potential social and human rights impacts and risks, required controls, applicable standards and other requirements specific to the scope of work. This information must also be reflected in the contract. The social performance component of the contractor’s proposal should be appropriately weighted and evaluated. Social requirements must be reflected in the contract and the contractor should not be allowed to commence work until all required plans, processes and procedures are developed and signed off. Where potential social and human rights impacts and risks are significant, a Contractor Social Management Plan (CSMP) should form part of the Contractor Management Plan (CMP). Contractor social management does not stop once the contractor mobilises to site: regular reporting, monitoring, and audits must be conducted to ensure that the contractor implements the contract (and CSMP, as applicable) as agreed, and to ensure that potential social and human rights impacts and risks are adequately managed.

Definitions

Contractor: An individual, a company or other legal entity with a formal supply chain or temporary employment services contract to do a specific job or to provide a specific service. The term contractor includes mining and non-mining contractors. This category includes any sub-contractors who are included as any part of these contractual arrangements. The term contractor also includes bidders; i.e. an individual, a company or other legal entity without a formal supply chain or temporary employment services contract to do a specific job or to provide a specific service, but which is trying to obtain such contract by going through a tender process.

Mining contractor: A contractor whose work with Anglo American is directly associated with the core processes of the mine and/or plant, and includes contractors involved in mining extraction, handling/beneficiation, processing, engineering maintenance and maintenance support, mining rehabilitation, gas drainage (ongoing mine operations) and roles that touch product through the midstream and downstream value chain areas of the business. This includes those contractors where Anglo American has outsourced a mining activity to the contractor.

Non-mining contractor: A contractor whose work with Anglo American is in a non-mining capacity; i.e. not directly associated with the core processes of the mine and/or plant.

Sub-contractor: An individual, a company or other legal entity contracted by a contractor to conduct (a portion of) the specific job or to provide (a portion of) a specific service as part of the contractor’s work with Anglo American.

Supplier: See contractor.

Vendor: See contractor.

Bidder: See contractor.

Lifecycle planning

Across the lifecycle of the asset, consideration needs to be given to how contractor-related impacts and risks are assessed, mitigated, managed and monitored. Even though, typically, there are few contractor workers involved in exploration drilling, the way such contractors interact with and behave around local stakeholders is crucial for Anglo American’s relationship and reputation with local communities. The same is true for the Environmental and Social Impact Assessment (ESIA) contractor, who engages with local communities, NGO and local governments to collect baseline data, assess potential impacts and design appropriate mitigation measures.

The highest volume of (contractor) employment occurs during the construction phase, during which the contractor workforce can consist of thousands of non-locals requiring accommodation near the mine site. Social and human rights impacts and risks being at their peak, it is crucial that EPCM contractors understand the potential impacts associated with their activities and implement the identified mitigations and controls, as agreed.