Community Management

 

Codelco and its Relationship with the Communities

Community management at Codelco

SO1Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting. To effectively promote sustainable development, the Corporation, when practicing social responsibility, responds to the impacts on society and the environment provoked by its decisions and activities through ethics, transparency, consideration for its stakeholders, and compliance with applicable laws¹.

For Codelco, community management is a part of social responsibility. As such, it contributes to achieving sustainable development and maintain a permanent relationship with the communities in areas of influence to respond to the impacts caused by production activities.

Community management seeks to achieve community support by means of transparent, trustworthy and respectful relationships. These allow establishing networks and alliances with public, private, and civil actors through participative activities that contribute to the land and its people. We seek to maintain and improve our positive reputational capital, which ensures the social license for developing operations and new projects.

¹ According to ISO 26000.

Controlling Mining Impacts in the Environment

EC9Understanding and describing significant indirect economic impacts, including the extent of impacts. Mining impacts are diverse, given that mining is a complex extraction activity that provokes social, environmental, and economic effects on the surrounding communities. For example, it might generate gaps and thus, promote tensions among those who participate in the industry and those who are excluded.

Environmentally speaking, a poorly managed mine can be responsible for air, soil, and water pollution, as well as for overburdening natural resources. Economically speaking, mining generates wealth and opens wide development possibilities, but its positive implications and effects are not always noticed by the surrounding residents. To control mining impacts on the social environment, the Corporation has two basic internal regulations: Corporate Guidance Nº 24, which contributes to ensuring proper evaluation of social aspects in investment capital projects, and the Community Relations Manual, which holds the tools to safeguard the community within capital investment projects as well as in operations.

During 2010 a second version of this manual was put into effect, and the socialization and application process was initiated.

Networks and Alliances with the Communities

Through the Codelco Good Neighbor program, the divisions and Explorations establish relationships with the community based on respect and transparency. Based on these two principles, ties with the stakeholders are defined and generated, among which we can find government and social organizations, schools, and municipalities, among others. With them, criteria for social development are established, defining several actions, preferably related to environment and education.

Regarding this, there are two models applied by divisions which merit highlighting:

Social Dialogues – El Teniente Division

During 2008 the division formulated this model to engage communities. The dialogues emerge from a concept which is used by the International Labor Oganization, ILO, which defines them as “(…) all kinds of negotiations and queries – and even the mere exchange of information – between government representatives, employers, and employees regarding matters of common interest relative to economic and social policies.”

The El Teniente Division dialogues seek to:

• Promote achieving consensus and the participation of involved actors.
• Overcome tensions inherent to conflicts, identifying not only the limitations but also the possibilities.
• Construct a shared management model to answer to concerns and expectations.
• Secure sustainable relations between different social actors.

The dialogues are structured in phases and begin with data gathering about the community, allowng to establish a profile from which the dialogues are jointly outlined. Through these, communal action plans are created defining actions that boost local development and enable contributions by the division, which are evaluated when finalized.

 

From the community maps that are generated during the dialogue process, the division not only develops different communicational activities regarding its actions, but also defines joint projects with the communities. These respond to diverse courses of action:

Work Panels – Andina Division

Work panels are a territorial intervention methodology performed by Andina since 2002, as a way of identifying, characterizing and working with stakeholders that are and will be associated to division expansion projects. In these panels, social organizations from the different areas participate, as well as the local Governments and the corresponding municipalities. The purpose is to channel the community’s requirements and prioritize them together, in order to optimize the use of resources that the Andina Division delivers to the different organizations, and coordinate with different government organisms. This way we promote the communal associative element, develop organization self-management capacity, and foster each of the participating organizations’ individual and collective development.

The division has territorial coordinators who every week visit the organizations in their territory. This allows detecting requirements in quality of life, infrastructure, training and employability, among others. Through these panels, resources provided by Sence remnants, direct divisional resources, and grant resources, among others, are directed. Currently, the division has 23 work panels under operation, 8 in the Los Andes province and 15 in the Chacabuco province. Together they gather more than 150 social organizations, and during 2010 they executed more than 150 initiatives

Social Projects

Developing communities in the Areas of Influence

Permanent communication with communities neighboring operations, and the analysis of the perception studies² results, allow knowing the social concerns of our stakeholders and look for mechanisms to solve them.

The social projects developed by Codelco in each division are associated to the areas of influence established by them.

² Sustainable Codelco Perception Study is carried out annualy since 2004. 

These were some of the projects carried out during 2010:

  

Development and Impact of Infrastructure Projects

EC8Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement. There is a direct relation between a country’s infrastructure and the quality of life of its inhabitants.

Infrastructure is a reflection of Chile’s growth, and also a form of social and economic integration; it favors the country’s competitiveness and allows access to the goods and services necessary for satisfying the population’s needs.

For Codelco, investing in infrastructure allows to continue improving the economic competitiveness of mining, as well as giving workers and the community in general a more pleasant and safe environment, and contributing to improve the quality of life in the localities in the area of influence.

Each division, within the framework of its social responsibility, has contributed in different ways to improving local infrastructure, supporting diverse projects such as:

Codelco Norte Division

The aridity in the division´s area of influence, along with strong winds and the distances between the city and interior localities set a need for more complex infrastructure, which requires great investments. The division, taking this situation into account, has made itself part of the Calama City Oasis Plan design. ³

In 2010 Codelco Norte and the highway administration of the II region agreed to invest US$ 150,000, to improve interior roads that connect with the road to Inacaliri. Additionally, the Design and Management Model for the Borde Río Park continued, with a divisional investment of 230 million pesos, which will allow the construction to begin in 2011, through public grants. In 2010 the pedestrian footbridge connecting the Salares and Volcanes neighborhoojds was delivered, work associated to the project that transferred workers from Chuquicamata to Calama, and that meant a 500 million pesos investment. Finally, in 2010 the division inaugurated the grant resource Improving My Neighborhood, to contribute to the development of neighbor offices and public areas. More than 100 million pesos were granted in 8 neighborhood meetings.

^ 3 Program that has been created with local authorities and road administration with the communities, it seeks to improve infrastructure of the city, improving quality of life..

Salvador Division

The division maintains a close relationship with the native Colla ethnic group, which resides in the Agua Dulce area belonging to the Diego de Almagro county, developing agricultural and cattle-raising activities in the areas adjoining industrial areas of the division, such as Potrerillos.

A number of projects have been carried out framed under this relationship, such as providing water supply through the implementation of a rural drinking water system, achieving the installation of two dispenser tanks and almost 20 rural drinking water connections.

Since 2009, the division has supported the ethnic group by installing photovoltaic solar panels in a project stemming from the Social Investment Fund. During 2010, a project to fit out sanitary services, which considered two shared bathrooms and five bathrooms in houses of the community, was carried out.

The support in infrastructure for this community contributes to its cultural promotion, given that allowing to supply basic services allows the development and strenghthening of their identity.

Andina Division

The division has defined as part of its area of influence some towns that are located along the sideof the International Road, access route to the Los Libertadores Border Crossing. Vehicles and heavy machinery transit daily in front of these communities on their way to the division operations. One of the towns of this sector is Riecillo, a village where almost 32 families live. In 1996, the community lost the access bridge connecting them to the International Road, being forced to transit insecurely on the railway. In October 2009 an agreement was made with the Municipality of los Andes, for an amount of 85 million pesos, to rebuild this bridge. Works were inaugurated in November 2010.

Furthermore, infrastructure projects for approximately 100 million pesos were defined, and the respective agreements for their execution were made.

Ventanas Division

During 2010, the division worked on a public lighting project in Ritoque, developed together with the Municipality of Quintero, so solve the poor public safety of this area. The division donated 40 million pesos to this project; which was inaugurated in May, 2010.

In the Puchuncaví county, upon request by local leaders, and together with the Municipality, 20 million pesos were agreed for the construction of 500 meters of sidewalks for the village of La Greda.

El Teniente Division

The division has operations in three regions of Chile: while mineral extraction is carried out from or deposits in the VI region, and the material is shipped through the San Antonio Port in the V region, the tailings dam is located next to Alhué county in the Metropolitan region. Alhué is a rural area, with one of the lowest incomes in the region, as well as several isolation conditions.

In 2006, the division agreed a framework with the local municipality, to promote sustainable development and improvement of the inhabitants’ quality of life. From this agreement several actions were developed, and in 210 the construction of a pedestrian footbridge was begun with an investment of over 460 million pesos, which should be contributed by the division.

Furthermore, a 15 million pesos agreement was made with the Metropolitan Region Department of Water Works and the Committee for Rural Drinking Water of Hijuelas de Lonchas, to change the route of the ducts ensuring their water supply. Finally, through a 2009 agreement with the Highway Department of the Public Works Department, paving works were carried out on Route G-686, where the division contributed with 149 million pesos.

Indigenous Communities

MM5Total number of operations taking place in or adjacent to Indigenous Peoples’ territories, and number and percentage of operations or sites where there are formal agreements with Indigenous Peoples’ communities.  Surrounding the mining activities, several types of communities flourish.

Among them, indigenous communities stand out for their relationship with the territory, their permanence and ties to land, and their diverse cultural heritage. The Codelco Norte and Salvador divisions, in the north of the country, carry out their operations with the presence of neighboring indigenous communities such as Quechuas, Atacameños, Aymaras, and Collas. The explorations area, on its part, work in areas where indigenous populations exist in the Norte Grande, mainly in the Arica and Parinacota, and Tarapacá areas.

Codelco Norte Division

The Codelco Norte division is part of the Alto el Loa Indigenous Development Area (IDA), constituted by decree Nº 189 of 2003, from the Ministry of Planning. The IDA has an approximate surface of one million, 270 thousand hectares, with an approximate population of 1,200 inhabitants. Within the IDA there are nine indigenous communities: San Francisco de Chiu-Chiu, Ayquina-Turi, Toconce, Lasana, Cupo, Caspana, Taira, San Pedro Estación, and Conchi Viejo. Its inhabitants preferably live in Calama and visit their localities to celebrate diverse festivities, that is, they share urban and rural characteristics that the division must be considered in their relationship.

Salvador Division

The El Salvador Division operations are close to Colla communities. The Colla people are formed by a collection of indigenous associations located in rural and urban sectors of the Atacama region. In the rural area we can identify communities of the Atacama mountain range, between Copiapo and Chañaral, who develop their activities mainly in ravines close to the El Salvador, Potrerillos, Quebrada Paipote, Quebrada San Miguel, Quebrada Carrizalillo and Rio Jorquera localities. In urban sectors, they live mainly in Copiapó, Estación Paipote, Diego de Almagro, Inca de Oro, Tierra Amarilla and Los Loros. The Salvador Division relates mainly with those groups that inhabit the Diego de Almagro county and areas surrounding Salvador and Potrerillos.

Explorations

Explorations is working in areas with an indigenous presence, due to explorations in the Arica Block and the Iquique Block.

The Arica Block, located on the XV region, is next to Alto Andino Arica Parinacota IDA. The Iquique Block, on its part, is located in the Antofagasta region, within Jiwasa Oraje IDA. The Furano and Campahue prospects involve the Tarapacá, Quillacnasa, Caigua, Parca and Iquinca towns. So far, activities on both blocks have been limited to geological reconnaissance, so no formal contact has been made with the neighboring communities, which would eventually happen if the projects go ahead.

The relationship with indigenous communities is regulated by a legal framework that considers ILO Convention 169, as well as the Indigenous Law and other regulations. Furthermore, on an internal level the Corporation has the Commitment with the Indigenous Peoples document that contains principles, criteria and regulations in accordance to legislation. However, the divisions carry out a number of additional commitments through diverse initiatives and collaboration agreements. In this sense, it’s worth mentioning the existing agreement between the Codelco Norte Division and the National Corporation for Indigenous Development, which serves as a framework for diverse initiatives.

Additionally, the division carried out specific actions, for example in Estación San Pedro, Lasana and Chiu Chiu. On its part, Salvador Division has performed diverse initiatives with the Colla community, especially regarding infrastructure.

Land Management

Use of territory has become a scarce resource that requires to be strategically managed, through an integral vision of operations, projects, and their relationship with the environment. The insertion of large scale mining companies, such as Codelco, in a determined territory must be done seeking the greatest compatibility between current and potential uses land, as a obey to long term objectives.

This is why sustainability of projects at Codelco depend, among others, on an adequate consistency between mining and environmental plans as well as different scale planning instruments, currently present in the project’s area of influence.

During 2010 important advances were made in territorial management matters, implementing a corporate team who organized two workshops. As a result, in December the first Corporate Guideline on Territorial Management was issued, along with a work plan for the divisions.

The main objective of the guideline is to establish the bases guiding territorial management in the Corporation and ensure that the territorial variable is incorporated into the business vision and is managed early and in a timely manner to secure feasibility of operations, projects, and mine closure.

Furthermore, this guideline answers to changes in the national environmental framework, specifically in Law 20,417, which stipulates that territorial compatibility of projects must be assessed in accordance with the current Regional and CommunityDevelopment Plans

Mine Closure

Mine closure has become a mine sustainability challenge.

Since 2007, Codelco has developed a permanent mine closure management. During 2010, decisions were made to improve corporate management, and the main main results were:

• Development of an annual Corporate mine closure workshop.
• Corporate closure costs base and updated provisions.
• Functional organization based on existing roles.
• Start of project closures portfolio in divisions.

MM9Sites where resettlements took place, the number of households resettled in each, and how their livelihoods were affected in the process. MM10Number and percentage of operations with closure plans. Current operations and new structural projects, as well as those for production expansion, must contemplate the design of closure plans in accordance with applicable laws since 2004. Even though no mine closure or community relocations have been recorded so far at Codelco, all its divisions have developed mine closure plans that were approved by the Mining and Geological Service in February 2009.

The measures proposed in closure plans relate to plant and infrastructure dismantlement, closure of access to underground mines, access to open pits, wastewater treatment, in situ closure of tanks and water evacuation dumps, and treatment of contaminated soils, among others. These items are classified in the dismantlement and restoring categories for accounting purposes, in accordance with International Financial Reporting Standards (IFRS).

Codelco also carries out so-called concurrent closures or progressive closures that consist of closing part of the installations during operative years, allowing to prevent, minimize, and control mine closure risks. The concurrent closure plans are part of the company’s social responsibility principle, as their purpose is to return, whenever possible, the territories and physical environments used by mining activity, to public use. Plans programed for this kind of closure, in the short to mid term for each division, are the following:

Corporate Challenges

The main challenges for Codelco’s mine closure management are: