This section provides guidance for sites about contractor social management. There are a number of potential benefits associated with contractor activities, including opportunities for local employment, increased skills and training opportunities, an increased demand for goods and services and associated indirect local employment and economic opportunities.

However, if not well managed, contractor activities can have negative impacts and damage Anglo American’s relationships with local communities and other stakeholders. Anglo American remains ultimately responsible for ensuring that our social performance objectives and requirements are met ‒ even though contractors undertake a significant portion of the work at our sites. Anglo American therefore recognises its obligation to ensure that contractor social performance is managed professionally.

Specifically, this section will:

• Help sites determine whether a contract is socially material or not.
• Outline the social performance aspects of the Anglo American process for contractor management as described in the Group Contractor Performance Management Standard .
• Detail the potential impacts and risks associated with contractor management in relation to social performance. Opportunities for benefit creation through contractor activities also exist and are addressed and further explained in Section 4A on Socio-Economic Development Planning.
• Provide guidance on including social performance issues in planning, sourcing, contracting, mobilising, managing, monitoring and closing-out of contracts.
• List the cross-departmental roles and responsibilities involved in contractor social management.

There is no standalone standard on Contractor social management in the International Finance Corporation (IFC) Environmental and Social Performance Standards (IFC PS), although it is referenced in a number of the Performance Standards. In particular, the Performance Standards establish that contractors are considered to be under direct control of Anglo American; that our sites’ social management plans, procedures, standards and practices apply to our contractors; and that Anglo American should ensure that contractors have the required knowledge, skills, and training to implement their scope of work.

In addition, the Performance Standards require Anglo American to conduct due diligence of our contractors in relation to certain human rights and labour-related issues such as debt bondage, human trafficking, forced and child labour, and ensure that our contractors comply with minimum wage, hours of work, overtime payments, occupational health and safety conditions and other legally mandated employment terms.

The IFC provides guidance on contractor social management in its good-practice note “Managing Contractors’ Environmental and Social Performance.”

Intended users

Various departments are responsible for different parts of the contractor social management process (plan, source, contract, mobilise, manage, close – as outlined in the Group Contractor Performance Management Standard), depending on the scope of the contract. The intended users of this section are therefore the departments of Social Performance, Supply Chain, Human Resources, Security, Safety and Sustainable Development (S&SD), Legal and the designated Anglo American contractor representative.

Relevance to other sections

Contractor social management involves several of the guidance sections in the Social Way Toolkit.

• Governance (Section 1)
  • Social Performance Management Committee (SPMC) – depending on the scope of the contract, contractor social management may require the involvement of multiple departments. The SPMC provides the mechanism to ensure that all relevant functions are engaged in tender evaluations, developing contractor social management plans and monitoring.
• Review and Planning (Section 2)
  • Where contractor social management has been identified as a risk, mitigation measures should be summarised in the Social Management Plan (SMP). The site’s SMP will also be used to inform the Contractor Social Management Plan (CSMP) and any controls or actions the contractor should implement to avoid, mitigate, or manage potential social risks and impacts in relation to its scope of work.
• Engagement and Analysis (Section 3)
  1. A. Stakeholder Engagement (3A) – the way in which contractors interact with external stakeholders can have significant impacts on Anglo American’s reputation. Sites typically impose requirements or restrictions on contractors for engagement and communication with communities, government entities, NGOs and media on a site’s behalf.
  2. B. Incident and Grievance Management (3B) – contractors are required to participate in Anglo American’s social incident and grievance investigation process as and when deemed necessary. It is important that contractor workers have access to a worker grievance mechanism, and that any external grievances related to contractor activities are properly investigated and closed-out. Grievances and incidents also provide information about contractor social performance.
  3. C. Social and Human Rights Impact and Risk Analysis (3C) – the Social and Human Rights Risk and Impact Analysis (SHIRA) identifies potential social and human rights impacts and risks at site level. These may be relevant to a certain contractor’s scope of work, in which case the contractor’s requirements for social performance should include relevant controls from the SHIRA. The SHIRA also assesses the potential risks related to contractor management.
• Impact and Risk Prevention and Management (Section 4)
  1. A. Socio-Economic Development (4A) – Local procurement and supplier development forms part of the Socio-Economic Development section.
  2. C. Community Health and Safety (4C) – certain contractor activities can have a negative impact on community health and safety. It is important to clearly outline the controls and requirements contractors should implement and adhere to, in order to prevent or minimise these negative impacts. Depending on the scope of work, the contractor may be required to develop an emergency response plan that includes references to external stakeholders who may be impacted, including vulnerable groups. Contractors should be aware of Emergency Preparedness and Response Plans and should be involved in the development of such plans as appropriate.
  3. E. Security Management and the Voluntary Principles on Security and Human Rights (VPSHRs) (4E) – Anglo American’s commitment to the Voluntary Principles on Security and Human Rights (VPSHRs) has implications for the selection process, training and required contractual language in relation to private security contractors.
  4. G. Site-Induced Migration (4G) – Depending on the scope of work and number of workers, certain contracts can impact on influx, particularly the Engineering, Procurement and Construction Management (EPCM) contractor. It is important to clearly outline the controls and requirements contractors should implement and adhere to, in order to prevent or minimise any negative impacts.
  5. H. Cultural Heritage (4H) – Depending on the scope of work, contractors may need to be aware of the site’s Chance-Find Procedure and other cultural heritage issues.