Review of the International Council on Mining and Metals members biodiversity performance management since 2003

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1 Review of the International Council on Mining and Metals members biodiversity performance management since 2003 October A report for IUCN and ICMM by Globalbalance and The Biodiversity Consultancy

2 2 Review of ICMM members biodiversity performance management since 2003 Acknowledgements Lead authors Globalbalance Annelisa Grigg The Biodiversity Consultancy Robin Mitchell John Pilgrim Contributor Globalbalance Jack Foxall IUCN / ICMM Secretariat ICMM Ruth Thomas Ross Hamilton IUCN Rachel Asante- Owusu Many thanks to the following individuals and organisations for their comments on and inputs into this document: ICMM members Kate McIntyre and Shelley Currin (Anglo American) Andrew Parsons (Anglo Gold Ashanti) Gabriel Fuenzalida (Antofagasta) Patty Simpson and Emilie Lacroix (Areva) Nerine Botes (ARM) Gail Ross & Melissa Barbanell (Barrick Gold) Erika Korosi (BHP Billiton) Paul Maidstone Casanova (Codelco) Chris Chambers Terry Enk and David Norris (Freeport McMoRan) Lisa Wade (Gold Corp) Duncan Stevens and Philip Woodhouse (Gold Fields) Bernt Malme (Hydro) Masatoshi Kawada (JX Nippon Mining and Metals) Hazel Fiehn (Lonmin) Natalie Shade (MMG) Mamoru Minami and Tadakazu Kagami (Mitsubishi Materials) Nick Cotts and Cynthia Parnow (Newmont) Ruth Kelley (Rio Tinto) Minoru Hatta and Katsuhiro Mori (Sumitomo Metal and Mining Company) Steven Hilts (Teck) Mayra Abreu and Marcelo Diniz (Vale). Project steering group Thanks also to the project steering group: Rachel Asante- Owusu and Steve Edwards (IUCN) Richard Cellarius (IUCN Commission and Sierra Club) Nick Cotts (Newmont) Annemarie Goedmakers (IUCN- CEM) Steve Hilts (Teck) Jonathan Hughes (IUCN) David Norriss (Freeport McMoRan) Andrew Parsons (AngloGold Ashanti) and Ruth Thomas (ICMM). External reviewers Zoe Balmforth and Pippa Howard of Fauna & Flora International Martin Sneary of IUCN Jon Hobbs of WWF Ray Victurine of the Wildlife Conservation Society. The methodology on which the analysis was based drew from Insight Investment s biodiversity benchmark Fauna & Flora International s Natural Value Initiative and the Mining Association of Canada s Towards Sustainable Mining Initiative.

3 Review of ICMM members biodiversity performance management since Table of Contents Acknowledgements Executive Summary Introduction Background Approach Limitations Results Biodiversity management system review Emerging issues assessment Recommendations References Glossary Appendix 1: Review of the methodology Appendix 2: Analysis of reporting against GRI indicators (v 3.1) Appendix 3: The changing face of biodiversity management Citation Globalbalance and The Biodiversity Consultancy (2014) Review of the International Council on Mining and Metals members biodiversity performance management since Unpublished report to ICMM & IUCN. Photo credits Argyle Diamonds Rio Tinto. Copyright 2014 Rio Tinto Energy Resources Australia Rio Tinto. Copyright 2014 Rio Tinto Fossa. Copyright 2008 Creative Commons member

4 4 Review of ICMM members biodiversity performance management since Executive Summary The state of biodiversity over most of the globe is declining despite increased activity by policy makers civil society and the private sector (CBD 2014). This poses risks for society and business. In 2003 ICMM and its member companies adopted a sector- leading stance on biodiversity committing to contribute to conservation of biodiversity and integrated approaches to land use planning and to not explore or mine in World Heritage properties. Since that time biodiversity has become a more material business issue for the metals and mining sector. Stakeholders expect companies as responsible businesses to manage biodiversity alongside other sustainability issues. Accounting firm KPMG recently highlighted a number of business risks (regulatory market financing and operational) and opportunities (increased access to capital stronger license to operate and reduced operational costs) for the sector associated with declining biodiversity (KPMG et al 2012). In addition the nature of biodiversity management has matured and is likely to evolve still further. This report sets out the results of a review of progress made in managing biodiversity among International Council of Mining and Metals (ICMM) members from 2003 to The report was jointly commissioned by ICMM and IUCN under their 2011 Memorandum of Understanding which aims to influence and improve mining companies performance in the area of biodiversity conservation management. It was overseen by a joint IUCN/ICMM Project Steering Group. The report identifies good practice the status of emerging issues and recommends areas for future action for ICMM members and the IUCN- ICMM dialogue. Twenty 1 ICMM member companies biodiversity management systems were evaluated against ten criteria each with five performance levels based on review of a sample of internal and external corporate information and company interviews. Biodiversity management system maturity was used as a proxy measure for performance on the ground in the absence of broadly agreed metrics for this purpose. ICMM members have shown a significant increase in the extent and sophistication of biodiversity management systems 2 over the last ten years (Figure 1). Particular progress has been made on policy and strategy commitments. Demonstrating that these developments have resulted in improved performance remains challenging. Continued efforts are essential to maintain a leadership position specific areas where more action are required include: closure planning site level performance metrics assurance processes and biodiversity action plan implementation (see table 1). Many of the areas identified for future work are common to other sectors and could be addressed through collaboration for example through fora such as the Cross Sector Biodiversity Initiative. Figure#1:#average#(mean)#maturity#of#biodiversity#management# systems#within#icmm#members#in#2003#and#2012/13# 10.#Public#repor@ng# on#biodiversity# 9.#Biodiversity# monitoring# 8.#Stakeholder# engagement# 7.#Suppor@ng# conserva@on# ac@ons# 1.#Commitments# 5" 6.#Closure#planning# 2003#(n=17)# progress highlights restora@on#&#sale# 2012/13#(n=20)# A greater risk- based focus on managing corporate impacts on biodiversity in addition to supporting the conservation of biodiversity not impacted by mining activities. More specific biodiversity commitments are in place for all members which are driving progress. Members remain committed to the ICMM Position Statement on Mining and Protected Areas corporate biodiversity management systems have been strengthened to support member commitments. Most members have assessed biodiversity risks at a corporate level to some extent although the scope and definition of risks and of high biodiversity value sites varies (see below). 4" 3" 2" 1" 2.#Corporate#level# risk#assessment# 5.#Resourcing# 3.#Site#level#impact# assessment# 4.#Biodiversity# management# 1 See companies. Antofagasta and Glencore were not members at the time of the review and were excluded from it. Vale was included in the analysis and has since left ICMM. 2 Biodiversity management systems are defined as the activities in place to manage corporate impacts on biodiversity.

5 Review of ICMM members biodiversity performance management since Table 1: Criterion and indicator scorecard for ICMM members highlighting progress made in biodiversity management and key areas for further development. 1.##Commitments Trend 6.#Closure#planning#restoration#&#sale Trend Mean#progress#against#criterion#1# Mean#progress#against#criterion#6# #Percentage#of#companies#with#a#high# level#biodiversity#policy/#strategy# commitment# 47% 100% 1.2#Percentage#of#companies#with#detailed# biodiversity#policy/#strategy#commitments#or# 0% 55% internal#guidance 2.##Corporate#level#risk#assessment Trend Mean#progress#against#criterion#2# #Percentage#of#companies#able#to#state# proximity#to#protected#areas#and/or#areas#of# high#biodiversity#value 53% 90% 2.2#Percentage#of#companies#with#some#form# of#tool#or#process#to#evaluate#corporate#level# risk 41% 85% 2.3#Percentage#of#companies#with# biodiversity#integrated#into#all#key#decision# points#(risk#registers#investment#planning) 0% 35% 3.##Site#level#risk#assessment Trend Mean#progress#against#criterion#3# #Percentage#of#companies#addressing# biodiversity#within#environmental#impact# assessments 29% 100% 3.2#Percentage#of#companies#considering#the# noigo#option#for#high#biodiversity#value# 0% 15% areas#at#the#earliest#stages#of#exploration 4.##Biodiversity#management Trend 6.1#Percentage#of#companies#that#have# addressed#biodiversity#in#closure#plans#at# over#half#their#sites#with#biodiversity#issues. 47% 79% 6.2#Percentage#of#companies#with#closure# planning#guidance#in#place#or#in#draft 0% 63% 6.3#Percentage#of#companies#with# requirements#in#place#to#ensure# 0% 32% sustainability#of#mitigation#actions 7.#Supporting#conservation#actions Trend Mean#progress#against#criterion#7# #Percentage#of#companies#with#a#range#of# activities#underway#to#support#biodiversity# conservation#over#and#above#direct#impact# 53% 85% management 8.#Stakeholder#engagement Trend Mean#progress#against#criterion#8# #Percentage#of#companies#with# biodiversity#formally#included#within#site#and# corporate#level#stakeholder#engagement# 8.2#Percentage#of#companies#with#civil# society/#government#partnerships#in#place#to# address#biodiversity#management#issues 35% 95% 6% 65% 9.#Biodiversity#monitoring Trend Mean#progress#against#criterion#9# Mean#progress#against#criterion#4# #Percentage#of#companies#with# monitoring#underway#for#high#risk#sites# 13% 44% 4.1#Percentage#of#companies#which#have# produced#biodiversity#action#plans#or# equivalent#for#all#sites#that#require#i.e.#are#in# 21% 63% or#near#high#conservation#value#sites 4.2#Percentage#of#companies#which# undertake#third#party#review#of#their# 57% 58% biodiversity#action#plans#or#equivalent 5.#Resourcing Trend 9.2#Percentage#of#companies#where# monitoring#of#biodiversity#performance# measures#demonstrates#progress#for#all#highi 0% 0% risk#sites 10.#Public#reporting#on#biodiversity Trend Mean#progress#against#criterion#10# Key Mean#progress#against#criterion#5# #Percentage#of#companies#with#resources# assigned#at#corporate#level#and#for#all#sites# identified#as#having#biodiversity#risks# 20% 53% 5.2#Percentage#of#companies#with# biodiversity#management#related#key# performance#indicators#for#personnel#with# biodiversity#management#responsibility Mean progress against criterion: this refers to the average of all members performance for the relevant criterion for 2003 and then 2012/13. Criterion trend: improved significantly (> 1 performance level change) Criterion trend: improved (< 1 performance level change) Criterion trend: no/ little change Indicator trend: improved significantly ( 40% change since 2003) Progressing well ( 66% companies active) 6% 45% Indicator trend: improved ( 40% change since 2003) Some progress needed ( 33% & 66% of companies active) 10.1#Percentage#of#companies#reporting#to# some#extent#(some#gri#indicators#case# studies#and#strategy#disclosures)# 10.2#Percentage#of#companies#reporting# comprehensively#(all#key#elements#of# biodiversity#management#outlined#and# progress#in#implementation#clear#all#relevant# GRI#indicators)#on#biodiversity#issues 28% 100% 0% 25% 10.3#Percentage#of#companies#with# externally#reported#biodiversity#data#subject# to#external#assurance 0% 55% Indicator trend: no/ little change Significant progress needed (<33% of companies active)

6 6 Review of ICMM members biodiversity performance management since 2003 A substantial (42 percent) increase in use of biodiversity action plans (BAPs) especially for high- risk sites but definitions of risk and ability to demonstrate effective implementation vary (see below). Already widespread in 2003 supporting conservation actions have increased still further. Biodiversity is routinely considered within stakeholder engagement by 95 percent of ICMM s membership compared to just over a third in Members working more collaboratively across sectors to advance biodiversity management practices 70 percent of members have partnerships in place to address biodiversity issues (2003: six percent). Areas for further development beyond 2014 Scope and quality of biodiversity risk assessment and management varies among ICMM s membership (for example direct impacts are addressed but cumulative and indirect impacts may be overlooked); this may lead to unidentified risks and overlooked opportunities. Policy and internal guidance to ensure the option not to develop areas of high biodiversity value beyond World Heritage Sites ( no- go ) are lacking: this may lead to license to operate issues. Greater consistency is needed in defining of high- risk/high biodiversity value areas beyond the traditional limits of formal protected area systems: although members identify proximity to areas of high biodiversity value interpretation of what constitutes such an area (and which NGO- defined priority areas to include) varies potentially leading to unidentified risks. Audit processes have yet to evolve to fully consider the extent and quality of biodiversity management for example the scope of issues addressed in impact assessments and degree of BAP implementation. Guidance on closure planning is often lacking potentially resulting in the failure of closure activities or compromised stakeholder relations. Financial or legal provisions to ensure the sustainability of mitigation actions post- closure are often considered too late in the planning process according to NGO reviewers of the report. More rapid progress on implementation is now needed but may be constrained by resource limitations (lack of personnel expertise and budget constraints) amongst ICMM members and their advisors e.g. certifiers impact assessors and verifiers particularly on emerging issues. No company or industry sector can yet measure biodiversity management system outcomes on the ground across their operations. This issue may expose members to risk given the increasing materiality of biodiversity for the sector and the potential for local stakeholders to identify poor performance. Existing (management system based) measures of biodiversity performance process are interpreted differently across the membership; this constrains members communication with stakeholders. Regulatory capacity sometimes lags behind ICMM member leadership on biodiversity management in particular for biodiversity offset design and environmental impact assessment. Emerging issues status assessment ( ) The business case and methodologies to address ecosystem services biodiversity offsets and commitments to no net loss or net positive impact (NNL/NPI) on biodiversity have yet to be fully defined in any sector. These issues are also subject to growing regulation and stakeholder concern globally. Amongst the ICMM membership: More than half the member companies have some form of commitment or aspiration to achieve no net loss or a net gain of biodiversity. However a lack of implementation guidance and lack of reporting and monitoring frameworks risk undermining the credibility of these commitments. Nearly half the member companies reviewed are testing methods for identifying ecosystem services impacts and project or affected communities dependencies to see how they might complement existing sustainability management practices. Over three quarters (85 percent) of members are developing offsets as a result of regulatory drivers 30 percent of members are also doing so on a voluntary basis. Few members have internal guidance on offset development and in some cases regulatory guidance is absent or limited. Given the growing emphasis placed on offsets as a mechanism to compensate for residual impacts increasingly with a specific goal such as no net loss this lack of guidance presents operational and reputational risks.

7 Review of ICMM members biodiversity performance management since Recommendations The advances in biodiversity management by ICMM members are commendable however they need to be increased further to meet emerging regulatory and financing requirements. The recommendations below outline priority actions for ICMM and IUCN. They were developed by the consultants in consultation with the Project Steering Group members of the ICMM Biodiversity Working Group and a small group of external reviewers. This review is an important contribution from ICMM and IUCN to the evolution of biodiversity management within the mining and metals sector. Broader consultation on the recommendations at for example the World Parks Congress in November 2014 is important. 1. Improve the ability of ICMM and its members to measure biodiversity management outcomes To satisfy stakeholders in the future members will need a small number of clear simple measures that can be applied to different geographic locations habitat types and scales of operation to demonstrate biodiversity outcomes at the site level. Guidance and a framework for selecting these metrics should be developed with leadership from IUCN and the broader conservation community. Review of current approaches to site- level monitoring and Global Reporting Initiative (GRI) indicators in conjunction with stakeholders to identify appropriate and practical outcome measures and to increase consistency in interpretation of existing measures is a key step in this. A further review of progress is recommended in five years using a streamlined set of measures derived from the above. 2. Develop and communicate ICMM s position on emerging issues ICMM and its members are seen as industry leaders on biodiversity; to maintain this position ICMM needs to establish with IUCN and its members the business case for addressing emerging issues (biodiversity offsets ecosystem services and NNL/NPI commitments) and develop and communicate leadership positions on them. 3. Update parts of ICMM s Good Practice Guidance on mining and biodiversity ICMM s Good Practice Guidance on mining and biodiversity was world- leading when first developed in It needs review to determine what additional guidance is needed for members their advisors and professional associations to address the emerging issues outlined above as well as to support continued improvement on the challenging areas of performance highlighted in Table 1 (i.e. impact assessment closure planning BAP monitoring). To ensure a robust and consistent approach to risk identification and management agreement is needed amongst ICMM members and the conservation community on the following: a common definition of high biodiversity value areas; minimum requirements for biodiversity risk and impact assessments; how members with differing exposure to biodiversity risks can implement ICMM s Sustainable Development Principle 7. This would best be done in consultation with stakeholders in particular governments and the conservation community. 4. Contribute to enhancing the capacity of regulators to support industry to conserve biodiversity ICMM members have an opportunity to raise the industry bar in biodiversity management and reinforce their leadership position by collaborating with IUCN and other conservation groups through public private partnerships to build capacity of regulators in key countries to align with global best practice for example through sharing approaches on impact assessments and biodiversity offsets. 5. Continue to work with partners to build member capacity on challenges and emerging issues Partnerships with biodiversity conservation organisations such as IUCN and its members and engagement with existing collaborations such as the Cross Sector Biodiversity Initiative have been instrumental in building member capacity on biodiversity issues and management approaches to date. Ensuring that these partnerships now focus on addressing the challenges and emerging issues identified in this report (through producing for example better articulation of the business case for managing biodiversity guidance documents webinars or pilot joint field projects) will help ICMM to maintain a leadership position and ensure the IUCN- ICMM dialogue remains relevant and credible.

8 8 Review of ICMM members biodiversity performance management since Introduction This report sets out the results of a review of biodiversity performance management amongst twenty International Council of Mining and Metals (ICMM) members since The review is a collaborative effort between the ICMM and the International Union for Conservation of Nature (IUCN). It was commissioned by ICMM overseen by a joint secretariat from ICMM and IUCN and produced by independent consultants Globalbalance and The Biodiversity Consultancy. It is part of a portfolio of projects that fall under the 2011 Memorandum of Understanding between IUCN and ICMM which aims to influence and improve metals and mining companies performance in the area of biodiversity conservation management. It identifies areas of good practice and areas for future action for ICMM members and the IUCN- ICMM dialogue. 2.1 Background In 2003 ICMM members committed to a series of Sustainable Development Principles. Principle seven made specific reference to the need for ICMM members to Contribute to conservation of biodiversity and integrated approaches to land use planning through respecting legally designated protected areas. dissemination of scientific data and supporting the development and implementation of scientifically sound inclusive and transparent procedures for integrated approaches to land use planning biodiversity conservation and mining. In 2003 the ICMM mining and protected areas position statement set out further commitments for ICMM members including to not explore or mine in World Heritage properties. Shortly after these commitments were made UK based asset manager ISIS (now F&C) undertook a study of biodiversity management in 20 companies within the extractive sector (ISIS 2004). It concluded that even those companies achieving the best survey results were only beginning the process of moving from policy into performance and reporting. The last ten years has seen evolution in; the scope nature and quality of external sustainability reporting the size of ICMM membership and in the nature of stakeholder expectations for biodiversity management (see figure 2). Figure 2: Milestones in the evolution of biodiversity management within the mining and metals industry The changing landscape illustrated by Figure 2 has meant that understanding of biodiversity as an issue has matured. The perception of what constitutes effective biodiversity management continues to evolve and is

9 Review of ICMM members biodiversity performance management since now is not the same as it was in This background of change will continue. The last ten years have focused on improving management systems and taking steps to improve on the ground performance. Management systems and their implementation are still evolving and the next 5 years is likely to see a further shift in emphasis to stakeholders (such as lenders governments local communities and local regional and national NGOs) demanding that companies demonstrate how these systems are translated to delivering improved management of biodiversity issues on the ground. 2.2 Approach The analysis examined the maturity and extent of implementation of biodiversity management systems for twenty ICMM members at two points in time in 2003 and in 2012/13 with a focus on mining activities. It assessed the performance of twenty ICMM members both in 2012/13 and in 2003 regardless of whether they were ICMM members in A project steering group drawn from IUCN s Secretariat Commissions and members and ICMM members provided guidance to the review advising on consultants to commission reviewing the proposed methodology endorsing steps taken to overcome challenges to the application of the methodology and commenting on drafts of the report. Members were reviewed against ten assessment criteria and associated performance levels. These were identified by consultancies Globalbalance and The Biodiversity Consultancy based on interviews with NGOs financial institutions and ICMM member organisations. These criteria were as follows: 1) commitments 2) risk assessment 3) impact assessment 4) biodiversity management 5) resourcing 6) closure planning restoration and sale 7) supporting conservation actions 8) stakeholder engagement 9) biodiversity monitoring and 10) public reporting. Under each criterion companies can score one of five different levels of performance allowing the maturity of ICMM members approach to biodiversity management to be assessed (level five being the most mature). The extent to which members considered indirect direct and cumulative biodiversity impacts in their approach was an important part of the analysis. The review was based on publicly available information interviews with members and a review on a sample basis of internal company documentation and data supplied by the company. Members activities on three emerging issues: ecosystem services biodiversity offsets and commitments to no net loss or net positive impact were also explored. A small group of external parties were given the opportunity to review and comment on an early draft of the report. See appendix 1 for details of the methodology used and groups consulted. 2.3 Limitations Limitations to this analysis include: an unavoidable element of subjectivity a focus on operations managed by ICMM members rather than by their partners reliance on company generated data with external review of company documentation limited to a sample of documents for each company and lack of access to data from A further limitation was the lack of a broadly agreed set of metrics for measuring on the ground biodiversity performance on which to base the assessment. The development of criteria to measure the effectiveness of biodiversity conservation action is an evolving field. Such criteria have only recently been developed and implemented by the conservation community and are being implemented principally at a site- level rather than organisational- level. All industry sectors face challenges in developing appropriate performance metrics for biodiversity and none have such metrics in place. The IUCN- ICMM project steering group agreed that it was therefore not feasible to develop such criteria for the metals and mining sector without extensive consultation and engagement. Furthermore the retrospective application of any criteria would prove extremely problematic due to lack of availability of data. An approach was therefore developed that used measures of the quality of corporate management systems. Whilst these may not necessarily reflect strong performance on the ground the project steering group agreed that such measures could nonetheless provide considerable insight to performance improvements made by ICMM members. ICMM and IUCN are exploring the

10 10 Review of ICMM members biodiversity performance management since 2003 development of on the ground performance metrics in a workshop and report separate to this analysis to address this issue. Challenges were also experienced in applying the methodology due to variability amongst the ICMM membership (size of company date of joining ICMM regulatory environment number of mine sites and extent of business diversification see figure 3). These differences mean that for some ICMM members with many sites in areas of high biodiversity with limited regulation biodiversity is a material issue. The issue is less material for companies operating in highly regulated environments on brownfield sites or sourcing ore through third parties. Such companies arguably need less sophisticated biodiversity management systems. Figure 3: Market capitalization as of 10 th July 2014 versus year joined of 20 ICMM members in study 3 Market'Capitalisa-on'(billion'GBP)' 120& BHP&Billiton&Ltd& 100& 80& Rio&Tinto& 60& 40& Anglo&American& Freeport&McMoRan& Barrick&Gold& Goldcorp& 20& Teck& JX&Nippon&Mining&&&Metals& Hydro& Newmont& Sumitomo& Lonmin& ARM& Areva& Anglo&Gold&AshanE& Mitsubishi&Mat.& Vale& Gold&Fields& MMG& 0& 1999& 2001& 2003& 2005& 2007& 2009& 2011& 2013& Year'of'joining'ICMM' Source: These limitations and how they were addressed are detailed in appendix 1. 3 Codelco was also included in the analysis but is not in the graph above as no market capitalization figures were available.

11 Review of ICMM members biodiversity performance management since Results This section sets out the results of the review of ICMM member progress in biodiversity management (section 3.1) and identifies the status of the management of three emerging issues (section 3.2). 3.1 Biodiversity management system review Overview Significant progress in biodiversity management has been made: over the last ten years ICMM members have demonstrated significant progress in all ten elements of a robust biodiversity management system. Particular progress has been made in setting commitments on biodiversity management (figure 4). Member activities on biodiversity are increasingly focused on impact management rather than philanthropy: in 2003 members often supported biodiversity conservation initiatives that did not link directly to business impacts (supporting conservation actions). Biodiversity management activities now combine such support with greater management of biodiversity impacts and risks for the business. All the figures in this section suggest a continued emphasis on supporting conservation actions. However it is important to note that the different categories of performance are not strictly comparable. It is more important to consider the extent of change for each criterion since There has been relatively small changes in the extent of member activity on supporting conservation actions. Much more marked increases in activity were observed in those criteria linked to identifying and managing impacts and risks associated with biodiversity. Companies that were not ICMM members in 2003 have made significant progress and their performance is now similar to that of long standing ICMM members: performance of companies that were ICMM members in 2003 was compared with that of those that have joined ICMM subsequently (figure 5). This showed that in 2003 ICMM members significantly out performed non- members. However by 2012/13 there was no real difference between the performance of those companies that had been long standing members of ICMM and more recent members. It is not possible to determine whether this is due to the more recent member companies engagement Figure 4: Average (mean) maturity of biodiversity management amongst ICMM member companies in 2003 and 2012/13 10.#Public#repor@ng# on#biodiversity# 9.#Biodiversity# monitoring# 8.#Stakeholder# engagement# 7.#Suppor@ng# conserva@on# ac@ons# 10.#Public#repor@ng#on# biodiversity# 9.#Biodiversity#monitoring# 8.#Stakeholder#engagement# 7.#Suppor@ng#conserva@on# ac@ons# 1.#Commitments# 5" Figure 5: Average (mean) maturity of biodiversity management comparison between long standing and more recent ICMM members 4" 3" 2" 1" 6.#Closure#planning# restora@on#&#sale# 1.#Commitments# 5" 4" 3" 2" 1" 6.#Closure#planning# restora@on#&#sale# ICMM#members#(2003#data)# Non#ICMM#members#in#2003#(2003#data)# ICMM#members#in#2003#(2012/13#data)# 2.#Corporate#level# risk#assessment# 5.#Resourcing# 3.#Site#level#impact# assessment# 4.#Biodiversity# management# 2003#(n=17)# 2.#Corporate#level#risk# assessment# 5.#Resourcing# Non#ICMM#members#in#2003#(2012/13#data)# 2012/13#(n=20)# 3.#Site#level#impact# assessment# 4.#Biodiversity# management#

12 12 Review of ICMM members biodiversity performance management since 2003 within ICMM enabling them to learn from existing member activities or with external forces (evolution of the business case increased perception of biodiversity as a material risk and more engaged finance sector). ICMM s Mining and Protected Area remains a defining commitment for members: all members stated that they were not carrying out exploration or mining activities in World Heritage Sites and had undertaken or (in the case of a relatively new member to ICMM) were undertaking a review to determine proximity to World Heritage Sites and broader protected areas. Extent of activity to manage biodiversity varies amongst the membership: both in 2003 and 2012/13 there was considerable range in maturity of management systems amongst ICMM member companies (and within companies at different sites). This reflects a variation amongst the ICMM membership in the level of risks and potential impacts associated with biodiversity. Figure 6: Mean maximum and minimum scores of ICMM members against ten biodiversity management criteria in 2003 and 2012/ " 2012/13" 10.#Public#repor@ng# on#biodiversity# 1.#Commitments# 5" 4" 2.#Corporate#level# risk#assessment# 10.#Public#repor@ng# on#biodiversity# 1.#Commitments# 5" 4" 2.#Corporate#level# risk#assessment# 9.#Biodiversity# monitoring# 3" 2" 3.#Site#level#impact# assessment# 9.#Biodiversity# monitoring# 3" 2" 3.#Site#level#impact# assessment# 1" 1" 8.#Stakeholder# engagement# 4.#Biodiversity# management# 8.#Stakeholder# engagement# 4.#Biodiversity# management# 7.#Suppor@ng# conserva@on# ac@ons# 6.#Closure#planning# restora@on#&#sale# 5.#Resourcing# Mean# Maximum# Minimum# 7.#Suppor@ng# conserva@on# ac@ons# 6.#Closure#planning# restora@on#&#sale# 5.#Resourcing# Mean# Maximum# Minimum# Measures of biodiversity management outcomes were impossible to collate for the ICMM membership: we attempted to collate quantitative data to reflect ICMM members management of biodiversity in 2003 and 2012/13 e.g. total area of land under management land disturbed and land under conservation management. This was not possible due to incomplete data and variations in data definitions between members. This lack of data is a fundamental barrier to ICMM members demonstrating the effectiveness of their management systems. Areas for further work remain: further work is needed on creating a consistent approach to identifying and managing biodiversity risks (criterion 2) the treatment of biodiversity risks (criterion 3) as early as possible within the project cycle the integration of biodiversity issues into closure planning restoration and sale/relinquishment (criterion 6) biodiversity monitoring (criterion 9) and reporting (criterion 10) - see Analysis of performance for each review criteria This section outlines the progress made by ICMM members in managing biodiversity highlighting the issues and areas of good practice for each management system criterion. The following key describes the criterion score- cards at the beginning of each section Key Mean progress against criterion: this refers to the average of all members performance for the relevant criterion for 2003 and then 2012/13. Criterion trend: improved significantly (> 1 performance level change) Criterion trend: improved (< 1 performance level change) Criterion trend: no/ little change Indicator trend: improved significantly ( 40% change since 2003) Progressing well ( 66% companies active) Indicator trend: improved ( 40% change since 2003) Some progress needed ( 33% & 66% of companies active) Indicator trend: no/ little change Significant progress needed (<33% of companies active)

13 Review of ICMM members biodiversity performance management since Commitments: commitments in place approved by senior management. Management system measure Trend Average (mean) performance in criterion Percentage of companies with a high level biodiversity policy/ strategy commitment 1.2 Percentage of companies with detailed biodiversity policy/ strategy commitments or internal guidance 47% 100% 0% 55% Progress Biodiversity policy Figure)7:))percentage)of)ICMM)members)with)biodiversity)policy)commitments) and strategy commitments are Current# more widespread in the membership: all 2003# ICMM members have biodiversity strategy or policy Percentage)of)ICMM)members)with)commitment) commitments compared to less than half in High#level#commitment# Detailed#commitment## Detailed#commitment#plus#NNL/NPI#commitment# Commitments made are more comprehensive: in 2003 none of the companies reviewed produced a detailed policy commitment now more than half do. A quarter now commit to achieving no net loss or net positive impact on biodiversity. Challenges (è recommendation 3 page 31) Year) 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Lack of detailed commitments and guidance may lead to variability in the scope and quality of biodiversity management amongst and within ICMM members: a number of ICMM members have high level commitments to biodiversity management without any supporting guidance on impact assessment biodiversity action planning and closure planning to enable sites and other stakeholders to interpret what those high level commitments mean. Given geographic variation in regulation on these activities the extent and nature of biodiversity management activities may vary considerably throughout individual companies and the ICMM membership. Explicit reference to ICMM commitments is rare in members policy commitments: although members often make reference to the ICMM commitment not to operate in World Heritage Sites on their websites only 35 percent of members make specific reference to this commitment within their policy statements. There is a risk that this commitment is not fully embedded within those organisations that make no reference to them within their internal commitments and guidance. Need for a persuasive business case: the lack of an effective business case for managing biodiversity and ecosystem services was identified by a number of ICMM members and NGO reviewers as a barrier to progress in managing the issue. Case studies MMG: sustainability policy states that MMG must "contribute to the conservation of biodiversity and integrated approaches to land use planning in areas where we operate". A supporting internal Environmental Management Standard refers to the mitigation hierarchy and the use of offsets. The Standard was reviewed against ICMM requirements and IFC Performance Standard 6 and sites were required to undertake a gap analysis against its requirements. Gold Fields: company commits to "contribute to biodiversity conservation" in a high level policy statement this is supported by detailed internal guidance which was developed in reference to the ICMM Good Practice Guidance for Mining and Biodiversity. It sets out the need to follow the mitigation hierarchy and the company s commitments to the ICMM Mining and Protected Areas position statement.

14 14 Review of ICMM members biodiversity performance management since Corporate level risk assessment: acknowledgement of risks associated with operating in areas of high biodiversity value (World Heritage Sites Protected Areas and other sensitive areas) and implementation of a portfolio- wide review of which assets are operating in high- risk areas. Management system measure Trend Average (mean) performance in criterion Percentage of companies able to state proximity to protected areas and/or high biodiversity value areas 2.2 Percentage of companies with some form of tool or process to evaluate corporate level risk 2.3 Percentage of companies with biodiversity integrated into all key decision points (risk registers investment planning) 53% 90% 41% 85% 0% 35% Progress Nearly all ICMM members have undertaken a formalized screening of proximity to protected areas: in 2003 nine of the 17 companies reviewed were able to state where they had operations located in or near protected areas. By 2012 all but two of the 20 ICMM members reviewed have identified where their operations might be located in or near protected areas. One of these is undertaking a review. However extension of this screening process to consider areas of high biodiversity value is less well developed. Corporate risk assessment processes have become increasingly sophisticated: there has been a shift particularly by larger companies with a large number of sites from the use of environmental impact assessments to inform a view of corporate risk. Now more formalized documented processes are used combined with mapping systems such as the Integrated Biodiversity Assessment Tool (IBAT) questionnaires and site level discussions or assessments to form a corporate view of sites that are exposed to significant biodiversity risks. This enables better prioritization of effort and activity. Challenges (è recommendation 3 page 31) Variation in scope and nature of corporate or site level risk assessment may lead to unidentified risks: frequently the exact scopes of risk assessments are unclear e.g. the company states that it assesses proximity to protected areas or areas of high biodiversity value areas but does not state what it means by proximity or high biodiversity value areas. Companies define key terms differently for example some specify a need to consider areas of high biodiversity value others refer to some/ all of the following: Key Biodiversity Areas Endemic Bird Areas biodiversity hotspots or species of conservation significance. This inconsistency means that some ICMM members are identifying and addressing a broader range of business and biodiversity risks than others. The scope of risk assessments has changed and is still changing: almost half ICMM member companies have undertaken a comprehensive risk assessment 4 for all sites in 2012 compared to none in For the remaining companies whilst risk assessments might be in place for all sites they may only consider direct and not indirect or cumulative impacts or may be based on limited data sets e.g. protected areas only. Some members are developing and testing bespoke tools with NGO partners to understand site level risk exposure based on direct indirect and cumulative impacts to biodiversity (see section 3). Case studies Teck: uses established databases (e.g. IUCN Red List World Database on Protected Areas) and Geographic Information Systems to identify protected areas areas of high biodiversity value and species at risk that occur within 25 km of operations and major development projects. These are combined with site level interviews to determine local risk. Risk factors included: residual biodiversity impact maturity of site level management of biodiversity media issues and perspectives of local communities of interest and potential lender requirements or approval process requirements. Barrick Gold: has undertaken a corporate level review to identify potential risks based on proximity to World Heritage Sites protected areas and other sensitive areas using the IBAT. 4 Risk assessment considers potential impacts (direct indirect and cumulative) on biodiversity including potential impacts on World Heritage Sites protected areas and other areas of high biodiversity value.

15 Review of ICMM members biodiversity performance management since Site level risk assessment: inclusion of biodiversity issues in site- level impact assessments in a manner that allows companies to consider and adopt an option of no- go. Measure Trend Average (mean) performance in criterion Percentage of companies addressing biodiversity within environmental impact assessments to an extent that reflects their corporate risk profiles 3.2 Percentage of companies considering the no- go option for areas of high biodiversity value at the earliest stages of exploration 12% 95% 0% 15% Progress Site impact assessments are increasingly driven by internal standards rather than regulatory requirements: biodiversity was considered within environmental impact assessments in 2003 but often only to the extent required by regulation. More companies now have internal standards in place that articulate requirements beyond those legislated. Companies with multiple project sites are increasingly using guidance to ensure a consistent approach to impact assessment: 70 percent of members have some form of guidance in place for integration of biodiversity into impact assessments compared to five percent in 2003; 20 percent have a small number of sites so there is less risk of variability in addressing biodiversity issues. ICMM s Good Practice Guidance on mining and biodiversity and IFC performance standard 6 are widely cited within these. Biodiversity issues and stakeholders are considered earlier in the exploration process: more than half of the members (55 percent) are now considering biodiversity issues at the earliest stage of exploration compared to 20 percent in One company commented that the process of impact assessment had become more inclusive over the last ten years with more formal and earlier consultation of and engagement with stakeholders. However this is at odds with feedback received from some of the NGOs that reviewed this report (see Acknowledgements) that biodiversity issues are often considered too late within the impact assessment process to be adequately addressed. There is therefore limited option to opt not to develop based on concerns regarding biodiversity impacts. Approaches to impact assessment have evolved and are still evolving: some companies are developing tools to better understand site level risks relating to biodiversity recognizing that the impact assessments may not have identified all potential risks particularly if undertaken ten or more years ago. Impact assessments increasingly include a consideration of cumulative impacts. Challenges (è recommendation 3 page 31) Although guidance is in place for impact assessments it may be open to interpretation: one company commented that although it had been a requirement for sites to consider indirect and cumulative impacts for some years some sites still focus largely on direct impacts. The no- go option as part of alternatives analysis is not specifically referenced within impact assessment guidance documents: although as ICMM members the companies reviewed are committed to avoiding impacts on World Heritage Sites a requirement for companies to consider the no- go option where impacts on protected areas and other areas of high biodiversity value areas may be significant is often not referred to within internal impact assessment guidance. Case studies Anglo American: developed the Biodiversity Overlap Assessment (BOA) tool to provide a high- level overview of business risks arising from biodiversity issues across operations project sites and key exploration sites. The company has used the tool to develop a global map of operations in relation to protected areas red list species and sensitive landscapes. The tool enables each site / mine / operation to upload recent operational footprint data. Risk is then assessed based on the application of the established Anglo American risk matrix therefore providing an output of a risk ranking of the site s potential impact on that area / species early in the exploration process. The tool is still being rolled out. Sumitomo Metal Mining Company: for projects over a certain size checks are undertaken to determine whether there is any risk to biodiversity. If it is determined through third- party environmental surveys performed prior to development that the project will have a significant impact on rare species then a management plan is prepared and implemented for preventing or for minimizing restoring and compensating that impact. To date no such sites have been identified.

16 16 Review of ICMM members biodiversity performance management since Biodiversity management: biodiversity issues managed at site- level through inclusion within site management plans or through stand- alone biodiversity action plans (BAPs). Management system measure Trend Average (mean) performance in criterion Percentage of companies which have produced biodiversity action plans or equivalent for all sites that require them i.e. are in or near high biodiversity value sites 4.2 Percentage of companies which undertake third party review of their biodiversity action plans or equivalent 21% 63% 57% 58% Progress The usage of biodiversity action plans has increased: in 2003 members managed biodiversity largely through ISO14001 management systems. The use of biodiversity action or management plans (BMPs) is now more common with almost 65 percent of ICMM members using them to manage biodiversity issues in addition to using existing environmental management systems (EMSs) see figure 8. BAPs and ISO14001 are mutually reinforcing. Adopting both approaches can help ensure that all biodiversity related impacts and risks are identified and managed within existing management systems rather than as an add on that may lead to marginalization of the management of the issue. A general Environmental Management approach is common for companies with only low risk sites: companies that do not use separate biodiversity action plans capture management/preventative controls and monitoring through environmental management systems are largely those that have reviewed their biodiversity risks and concluded that the issue is not significant for them. Figure)8:)percentage)of)ICMM)members)using)stand)alone)biodiversity)ac<on)plans) Current# 2003# 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Percentage)of)ICMM)member)companies) Companies#managing#biodiversity#through#BAPs#or#BMPs# Companies#managing#biodiversity#through#EMS## Guidance to support biodiversity management at site level is now common: over 80 percent of the companies that have more than five mine sites have some form of guidance in place to ensure a consistent approach to delivering corporate biodiversity commitments none of the companies reviewed had guidance in place in Guidance most frequently cites the ICMM Good Practice Guidance on Mining and Biodiversity and the South African Mining and Biodiversity Guideline that was based on the ICMM Good Practice Guidance 5 the IFC s Performance Standards and the Mining Association of Canada s Towards Sustainable Mining. Development of NGO- inclusive assurance programmes: a small number of ICMM members have developed external assurance processes with NGOs such as IUCN and Fauna & Flora International. 5 Department of Environmental Affairs Department of Mineral Resources Chamber of Mines South African Mining and Biodiversity Forum and South African National Biodiversity Institute Mining and Biodiversity Guideline: Mainstreaming biodiversity into the mining sector.

17 Review of ICMM members biodiversity performance management since Challenges (è recommendation 3 page 31) Variability in management of biodiversity issues may be greater in some members than other: some members have no guidance in place for developing and implementing BAPs. Whilst this was understandable in companies with a small number of highly regulated sites for companies with multiple operations in a range of geographies this may lead to a lack of consistency in addressing biodiversity. Reliance on existing assurance processes may not adequately address biodiversity issues particularly in areas of high biodiversity value: members commonly rely on ISO14001 style certification audits however there are known issues with the variability of the quality of such audits and the understanding of biodiversity issues may vary amongst certifiers. Case studies Anglo American: a programme of third- party environmental management system audits and biodiversity peer reviews is conducted in conjunction with environmental NGO Fauna & Flora International. It is used to provide operations with guidance on how to improve their performance and achieve full compliance with Anglo American requirements. JX Nippon Mining and Metals: at the company s Caserones mine site in Chile steps are being taken to prevent minimize or reduce impacts on biodiversity. Activities proposed/ underway include a rescue/collection and relocation plan for protected flora species and for protected amphibians reptiles and vizcachas (a rodent) prior to construction work in the area. An area equal to 160 percent of the affected area will be reforested. Goldcorp: four of the company s nine operations are legally required to have some form of biodiversity management plan all of which are currently in place. However all operations have voluntarily developed and implemented biodiversity management practices. At the Marlin mine in Guatamala reforestation activities are underway as compensation for the direct impact of tree cutting within the mine area footprint. Rio Tinto: all sites that rank as very high or high in Rio Tinto s corporate level assessment of risk must have a Biodiversity Action Plan (BAP) in place. BAP guidance is in place that was developed and tested in conjunction with NGO partners. This guidance considers indirect and direct impacts requires time- bound targets to be set requires responsibility and resources to be assigned follows the mitigation hierarchy and requires consideration of local stakeholder views. In addition to a four yearly health safety environment and community audit the company is working with IUCN to develop a protocol to provide assurance over its commitments to net positive impact at site level.

18 18 Review of ICMM members biodiversity performance management since Resourcing: allocation of resources and training of staff/contractors to ensure implementation of biodiversity commitments/ management. Management system measure 2003 Status Trend Average (mean) performance in criterion Percentage of companies with resources assigned at group level and for all sites identified as having biodiversity risks 5.2 Percentage of companies with biodiversity management related key performance indicators for personnel with biodiversity management responsibility 20% 53% 6% 45% Progress Capacity to manage biodiversity issues has been increased amongst the membership: resourcing levels have increased since 2003 much of this is attributable to a formalization of biodiversity management responsibilities. Some companies such as Barrick Gold have built internal capacity on environmental and social issues more broadly since 2003 increasing group level capacity on biodiversity issues and increasing the level of expertise on biodiversity issues at site level. Within smaller companies an integrated approach to managing biodiversity with water and climate (and in some cases social management) is helping to raise the profile of biodiversity issues. Expertise is increasingly being accessed from NGOs long term relationships with consultants and academia: there has been an increase in the members working in partnership with NGOs or academia to develop tools and approaches or fill information gaps (see section 8). Adoption of a more sophisticated approach to biodiversity management may mean more technical resource is required at some sites (through requirement or partnerships with appropriate organisations): a number of companies are in the process of developing biodiversity action plans for all sites implementation of these plans may require greater capacity in biodiversity management. Challenges (è recommendation 5 page 33) Resource and capacity constraints may constrain future progress in biodiversity management: the challenges currently being experienced by the industry are being reflected by budget constraints linked to metal price cycle fluctuations and associated restructuring. Although resources and capacity has increased since 2003 the overall impression generated from the interviews and supported by NGO feedback was that sustainability teams were resource constrained and in some cases reliant on generalists and technical consultants rather than having in house expertise. This lack of resource could undermine otherwise robust management systems leading to reputational operational and financing risks associated with adverse impacts on biodiversity in the future. Loss of institutional memory: very few staff members were interviewed who were in place in 2003 this represents a significant loss of institutional memory particularly if the approach to biodiversity management is not well documented or systematized. Management of biodiversity issues is frequently not an explicit part of environmental managers performance review systems: key performance indicators (KPIs) were rarely set for biodiversity related issues unless the issue posed a particularly material risk more often biodiversity was managed through broader KPIs linked to environmental compliance.

19 Review of ICMM members biodiversity performance management since Closure planning restoration and sale: provisions made in closure planning and for sale to third parties that ensure continuation of responsibility for biodiversity management actions. Management system measure Trend Average (mean) performance in criterion Percentage of companies that have addressed biodiversity in closure plans for over half of their sites with biodiversity issues. 6.2 Percentage of companies with closure planning guidance in place or in draft 6.3 Percentage of companies with requirements in place to ensure sustainability of mitigation actions 47% 79% 0% 63% 0% 32% Progress Inclusion of biodiversity issues in closure plans has significantly increased: closure plans were in place in 2003 but were often focused on financial analysis without clearly formalized actions requirements and monitoring for biodiversity. The overall trend is now of greater consideration of biodiversity in closure planning with nearly 80 percent of companies with closure plans that address biodiversity issues for more than half their operations in 2012/13 compared to just under 50 percent in Whether these plans address biodiversity in accordance with accepted best practice was outside the scope of this project. Biodiversity requirements are now being stipulated by some members in corporate closure guidance documents: since 2003 a number of companies with multiple mine sites in diverse geographic locations have developed closure standards or guidance to ensure a consistent quality of closure planning often referencing ICMM s Good Practice Guidance on Mining and Biodiversity. Challenges (è recommendation 3 & 5 page 31-33) Closure plans may not adequately address biodiversity issues: not all members have guidance in place to encourage a consistent approach to addressing biodiversity in closure planning furthermore biodiversity issues are frequently considered late in the closure planning and financial provisioning process. There is some perception amongst NGOs that whilst biodiversity is addressed within closure planning it may not adopt an ecological restoration approach. Since the scope of this review allowed only a limited review of company documentation it is not possible to verify this. Lack of explicit requirements to ensure sustainability of mitigation actions on sale or closure puts them at risk of failure: financial provisioning for closure planning is practiced by all companies surveyed and is often a legal requirement. However processes or requirements to ensure the sustainability of mitigation actions after closure are less well developed with less than a third of the companies reviewed having documented requirements in place. Case studies Newmont: the company plans for closure before operations begin sites must set up a process for regular review and update of closure plans with external stakeholders over the mine's life. Newmont has a Closure & Reclamation standard that reflects Newmont s biodiversity standard. It requires projects to include closure and reclamation planning and management of long- term liabilities associated with mining throughout the mine lifecycle. The Closure and Reclamation Technical Team develops and applies a system that ensures the approach to site closure and reclamation are consistently evaluated and reported at each stage of the mine life cycle. A Biodiversity Guidance document was launched in 2014 and has an internal commitment that each operating site shall develop a Biodiversity Action Plan by Freeport McMoRan: all sites have closure plans in place. Biodiversity issues are incorporated where appropriate. Landscape Function Analysis monitoring is used to assess how well certain reclamation areas are functioning as a natural system in comparison to reference sites. The company s Historic Mine Opening Safety Program (HMOSP) try to safely close historic mine openings and workings on company property to protect human health and safety while also protecting potential wildlife habitat that these resources provide. To date HMOSP has installed over 1200 wildlife- friendly closures at mine openings in several states across the US where inactive operations are located. The closures are designed in consultation with wildlife experts prior to implementing.

20 20 Review of ICMM members biodiversity performance management since Supporting conservation actions: non- mitigation/ offset actions underway to benefit biodiversity e.g. scientific research environmental education capacity building or dissemination of scientific data. Management system measure Trend Average (mean) performance in criterion Percentage of companies with significant range of activities underway to support biodiversity conservation over and above direct impact management 53% 85% Progress ICMM members have a history of supporting additional conservation actions: in 2003 all but two companies had some form of action (at least one project) underway to support biodiversity conservation over and above the management of their direct impacts only half had two or more projects in place. In 2012/13 all ICMM members reviewed have a significant range of philanthropic activities underway (two or more projects). For all companies reviewed in 2012/13 this was in addition to management of their direct and indirect impacts on biodiversity rather than instead of a key change from The nature of support for conservation has changed: the focus of activities in 2003 was on research and development environmental education and awareness the provision of support to conservation activities on the ground and community capacity building. Recent years have seen members also engaging in the development of decision- making tools and guidance for biodiversity management for the industry and other sectors through industry or cross sector collaborations (see figure 9). Figure'9:'Nature'of'ac0ons'undertaken'by'ICMM'members'to'support'biodiversity'conserva0on' Support#for#capacity#building#/environmental#awareness#and/or# biodiversity#conserva2on#programmes# Contribu2ng#to#decisionDmaking#processes#and#assessment#tools# Contribu2ng#to#good#prac2ce#guidance# Suppor2ng#biodiversity#related#R&D# 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Current# 2003# Challenges (è recommendation 4 page 32) Further collaborative action with other sectors could help address barriers to effective biodiversity management: the focus of ICMM collaborative action is on initiatives such as the Cross Sector Biodiversity Initiative Proteus and the Business for Social Responsibility working group on ecosystem services. Whilst all important and valid initiatives some challenges were identified by ICMM members that are not currently addressed through these initiatives. These challenges include a lack of capacity amongst regulators to ensure delivery of robust strategic environmental impact assessments environmental impact assessments and biodiversity offsets. Continued collaboration with the conservation community will be important: continued engagement and access to collaborations with environmental NGOs will be important to enable access to data and stakeholders required to effectively manage biodiversity. Supporting conservation actions are important means of facilitating this engagement and building trust.

21 Review of ICMM members biodiversity performance management since Case studies ARM: in Lubambe Mine in Zambia (a joint venture partnership between ARM and Vale) deforestation for charcoal production was causing significant health issues soil erosion and loss of wildlife. ARM worked with local communities to raise awareness of the issue and plant native tree species. They provided a source of low cost recycled wood from the mine s packing crates for local furniture making (which was using native species). AngloGold Ashanti: the company was closely involved in the development of guidance for the South African mining industry on mining and biodiversity drawing on its experience from the development of ICMM s Good Practice Guidance on Mining and Biodiversity. BHP Billiton: the company has committed to a five year target for the financing of the conservation and continuing management of areas of high biodiversity and ecosystem value that are of national and international conservation significance. As of the financial year 2014 an investment of USD 35 million had been committed to the Five Rivers Conservation Project (Australia) and the Valdivian Coastal Reserve (Chile). Together these areas will conserve over ha of land into perpetuity through a partnership with Conservation International (CI) and implementing partners The Nature Conservancy and Tasmanian Land Conservancy. An alliance has been established with Conservation International to provide support for conservation project selection and oversight as well as contribute to improving BHP Billiton s approaches to land and biodiversity management. Freeport McMoRan: corporate strategy emphasizes the development of opportunities for biodiversity conservation linked to Freeport s operating sites. The company has a range of activities in place including: a riparian habitat restoration program at the Bridle Creek Habitat Enhancement Area near the company s Arizona Bagdad operation the creation of wetland habitat for the boreal toad near Henderson molybdenum mine in Colorado the construction of pollinator gardens in mining related lands to help address the global decline in pollinators and a global conservation initiative for bats.

22 22 Review of ICMM members biodiversity performance management since Stakeholder engagement: identification and engagement with relevant stakeholders including public policy makers on biodiversity issues. Management system measure Trend Average (mean) performance in criterion Percentage of companies with biodiversity formally included within site and corporate level stakeholder engagement 8.2 Percentage of companies with civil society/ government partnerships in place to address biodiversity management issues 35% 95% 6% 65% Progress Biodiversity is now routinely considered within site and corporate level stakeholder engagement processes for 95 percent of the ICMM members reviewed (2003: 35 percent): some interviewees stated that the key difference is that engagement is now initiated earlier in the mine exploration and development process. This leads to earlier identification and more proactive management of biodiversity risks and opportunities. Members are working more collaboratively often with multiple partnerships in place with NGOs local communities and governments with 70 percent of members now having some form of partnership in place to address biodiversity issues (2003: six percent). Challenges (è recommendation 5 page 33) Free Prior Informed Consent (FPIC) is a work in progress: integration of Free Prior Informed Consent within stakeholder consultation and engagement standards has not yet been achieved for a number of companies. This reflects the relatively recent agreement of guidance on the issue amongst the ICMM membership through its 2013 Indigenous Peoples and Mining Position statement (due for implementation in 2015). A number of members were unclear on the links between FPIC and biodiversity or ecosystem services suggesting a need for guidance or training on this issue. Considering impact and influence on a landscape level is likely to be important in future: in the context of increasing competition for land water and food metals and mining companies will increasingly have to understand and manage for the needs and cumulative impacts of other users of the landscapes within which they operate (agricultural competitors natural landscapes other industrial users communities). Case studies Areva: at Kiggavik mine Canada consultations were undertaken with community residents to understand local diet reliance on wildlife and to develop models of hunter resource and land use. Satellite collar information and aerial surveys for caribou were also overlaid with local traditional knowledge such as hunter- identified water crossing and migration paths. These activities informed the environmental impact assessment including the selection of the preferred design option for the road corridor; assessing potential changes in caribou movement due to the project development and the acceptability of those potential changes. They also provided a more comprehensive baseline against which to compare later monitoring results and informed the wildlife mitigation and monitoring plan for construction operations and decommissioning stages. The Cross Sector Biodiversity Initiative: a partnership between ICMM IPIECA (the global oil and gas association for environmental and social issues) and the Equator Principles Association (finance industry association focusing on environmental and social risk in projects) it aims to develop and share good practices related to biodiversity and ecosystem services in the extractive industries. The work programme includes knowledge sharing and developing guidance on biodiversity baseline data collection and on the mitigation hierarchy.

23 Review of ICMM members biodiversity performance management since Biodiversity monitoring: Biodiversity conservation monitoring and evaluation systems that are in place to inform decision- making and to inform public reporting. Management system measure Trend Average (mean) performance in criterion Percentage of companies with monitoring underway for high- risk 6 sites 13% 44% 9.2 Percentage of companies where monitoring of biodiversity performance measures demonstrates progress for all high- risk sites 0% 0% Progress Monitoring of progress in biodiversity management has increased: biodiversity issues and impacts were managed through ISO14001 and similar environmental management systems (EMS) in Whilst targets and milestones were set and monitored through the EMS the focus was on regulatory compliance and monitoring of emissions/ effluent that could have an impact on human health and wildlife. Nearly half of ICMM members now have some form of monitoring in place that checks progress made against biodiversity action plans targets and milestones for high- risk sites (areas of high biodiversity value that face a potential threat). Commitments are being made by a small number of companies that are encouraging the development of accounting frameworks for biodiversity: these aim to quantitatively measure impact reduce residual impacts and balance them with gains from mitigation activities. Two companies have adopted the pressure state response framework commonly used within the conservation world to monitor biodiversity issues at site level. Challenges (è recommendation 1 page 30) Metrics that enable measurement of biodiversity performance at and across sites have not yet been developed or broadly agreed for any business sector: ICMM member monitoring of biodiversity performance focuses on management system measures which show little insight into performance on the ground. As a result no ICMM member (or indeed any other companies or sectors) can readily demonstrate progress in biodiversity management for all its high- risk sites. This is a key area where the industry and other sectors with significant biodiversity issues need to make progress. Leadership from the NGO community is required to help industry progress on this issue. Progress of biodiversity management at high risk sites is not tracked by all ICMM members: although some companies are monitoring progress of biodiversity action plans through tracking progress made against milestones more than half of ICMM members are not. As a result the extent of implementation of action plans is not clear for a significant proportion of ICMM s membership. Case studies Gold Fields: the company s Biodiversity Practice Guide requires sites to conduct a comprehensive monitoring and assessment regime in relation to the effectiveness of biodiversity conservation measures on site. Indicators typically include: i) condition indicators (such as species diversity endemism and population size); ii) pressure indicators (such as the extent of habitat or native vegetation clearance and survival); and iii) response indicators (such as area re- vegetated). Mitsubishi Materials: aims to source 75 percent of ore from minority owned investments having no metals mines itself. The company monitors investment companies' compliance with its Corporate Social Responsibility Investment Standard which requires them to "Identify and evaluate impacts to cultural 6 Sites identified as being causes of potential reputational operational and financial risk as a result of their biodiversity profile. This could include sites that are located in or near protected areas or other ecologically sensitive sites (Foxall et al. 2005).

24 24 Review of ICMM members biodiversity performance management since 2003 heritage and protected areas and risks to biodiversity at different stages of [their] business [and] develop and implement mitigation measures. Rio Tinto: metrics currently used to assess progress are management system based however the company is working towards an accounting framework to demonstrate net positive impact. Operations requiring a BAP have a target to commence implementation of BAPs by 2015 that support achievement of net positive impact on biodiversity at or before site closure. Quality hectares is the preferred measure for habitats however other appropriate measures may be used for other biodiversity features. Teck: requires all sites to report on progress made against reclamation targets. Aquatic monitoring plans are in place for all sites. Internal guidance recommends sites to monitor progress using the pressure state response framework. Area of land / quality hectares are being used as a primary measure of attainment of the company s commitment to net positive impact.

25 Review of ICMM members biodiversity performance management since Public reporting: The success or failure of biodiversity management is reported publicly. Management system measure Trend Average (mean) performance in criterion Percentage of companies reporting to some extent (some GRI indicators case studies and strategy disclosures) 10.2 Percentage of companies reporting comprehensively (all key elements of biodiversity management outlined and progress in implementation clear all relevant GRI indicators) on biodiversity issues 10.3 Percentage of companies with externally reported biodiversity data subject to external assurance 28% 100% 0% 25% 0% 55% Progress Members are using the core Global Reporting Initiative indicators widely: the GRI indicators for biodiversity are the most commonly used biodiversity indicators in external reporting in line with ICMM members commitments to report using GRI (see figure 10 below and appendix 2). However some important additional indicators such as EN13 habitats protected are not widely reported and a number of core indicators are not reported by all ICMM members. Figure)10:))extent)of)repor;ng)of)GRI)biodiversity)indicators) GRI)biodiversity)indicator)(A)=)addi;onal)C=)core)) EN15#(A)# EN13#(A)# MM1#[C]# MM2#[C]# EN12[C]# EN11#[C]# EN14#(A)# 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# Percentage)of)ICMM)members) Full# Par<al# None# Biodiversity has become a more material issue for corporate disclosures: disclosures of biodiversity within annual reports increased from 30 percent of members in 2003 to 45 percent of members. Furthermore biodiversity is now considered to be a material issue for 60 percent of ICMM members as a result of internal materiality assessments compared to 11 percent in Disclosures are more quantitative in nature: reflecting an underlying trend towards increasing professionalization of corporate sustainability reporting disclosures on biodiversity issues have become more data focused and less case- study based in the last ten years. Now almost all (95 percent) members report in some detail (i.e. report against some GRI indicators provide case studies and strategy / management system disclosures) on biodiversity issues compared to 11 per cent in 2003.