A Legitimate Path Forward: Yanacocha s Community Engagement Progress

Transcription

1 A Legitimate Path Forward: Yanacocha s Community Engagement Progress

2 Historical Background and Diagnosis Yanacocha s presence in Cajamarca has been marked by a series of events and behaviors that have defined the company s profile within the local community. Issues around land purchases in the early 1990 s, allegations of corruption, the mercury spill in 2000, and the 2004 Quilish and 2006 Combayo events are some of the most visible incidents that impacted company reputation in Cajamarca, Peru and around the world. The nature of the community-company relationship in recurrent day-to-day interactions throughout the history of Yanococha has also contributed to the erosion of our company s legitimacy, specifically in Cajamarca. A perceived lack of transparent criteria in employee recruitment has caused a sizeable portion of the Cajamarca population to feel undervalued as local professionals. Likewise, potential local suppliers voice similar complaints in regards to the procurement of goods and services. Also, the lack of consistent criteria in our social investment approach has contributed to the generation of high expectations and resentment in those who do not see their expectations fulfilled. Cajamarquinos have a widespread sentiment of exclusion from the benefits of mining and this has been expressed in grievances across a broad range of areas; for instance, the displacement of rural families after they sold their land is an argument voiced against mining. Similarly, the rise in the cost of living in the city is also viewed as a consequence of mining activity. Local community members not participating in mining have been displaced by company and contractor employees from their normal routines, restaurants and social spaces. They have also expressed that their standard of living has decreased. Building Legitimacy Legitimacy is defined as the recognition by key social actors of the company actions and behavior as correct, appropriate and value generating based on local laws, values and beliefs (Suchman, M. 1995) 1. In response to the identified perceptions and to independent studies about Yanacocha including the Listening to Cajamarca study by the Center for Social Responsibility in Mining (CSRM - University of Queensland) and the Conflict Management and Corporate Culture study (Corporate Social Responsibility Initiative - University of Harvard), we are renewing our work to achieve legitimacy for Yanacocha by those key social actors. Four Legitimacy Components will serve to guide the focus of Yanacocha s behaviors and interactions with Cajamarca so that legitimacy is attained. These four components represent the effort of Yanacocha to be (1) Respectful of Cajamarca, (2) Development Partner for Cajamarca, (3) A Responsible Actor in Water and Environment, and (4) Transparent and Credible. This will mean open, honest and transparent community engagement at both institutional and grass roots levels to build trust and credibility and thus contribute to the creation of shared value. These 4 objectives aim to strengthen engagement and enhance the quality of our relationships with the community and the actions linked to the objectives reflect our long-term vision to relationships building. Our recent community engagement efforts have focused on re-establishing contact with authorities and 1 Suchman, M. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review 20, pp

3 civil society. The company intends to complete the actions listed below and asks the community to hold us accountable to our responsibilities. Similarly, we hope the community will view these actions as a positive step forward and engage constructively and collaboratively with the company as we re-engage with the community and demonstrate our commitment to establishing legitimacy with Cajamarca. The first chart outlines the legitimacy-based objectives and themes, and the second chart details the specific actions taken in 2013 for social re-engagement in the effort of Yanacocha to obtain legitimacy. Legitimacy Key Objectives Internal Engagement Institutional Engagement Community-based Engagement Respectful of Cajamarca - Recognized as mindful of the social concerns and expectations of the communities and transparent in actions and positions. - Employees are seen as respectful and responsible citizens. Conduct internal communication and training programs to promote responsible behavior. Strengthen relationships with key institutions such as Professional Organizations and Universities. Unify and streamline Complaints and Grievance mechanism for increased responsiveness, access and coverage. Participation in agreement processes for sustainable development in topics of common interest to communities within our area of influence. Development Partner for Cajamarca - Have a defined and common interest of development with communities from Cajamarca, Bambamarca, San Pablo and Celendin. - Recognized for contribution to and stimulating social development broadly defined (e.g. water and education). - Acknowledged for promoting opportunities for Cajamarquinos. Redefine our lines of social intervention to focus on Education, Agricultural programs, and Water / Environmental Protection. Fulfillment of commitments with transparency and excellence. Yanacocha leadership team takes an active role in community development projects. Engage local, regional and local governments to articulate development proposals for Cajamarca. Produce reports for local and national media to disseminate development projects and programs. Generate public private partnerships to make regional and local development viable. Promote forums to debate the impacts of mining in the urban and rural areas. National Government involvement in funding Regional and Local public investment. Water and Environment A responsible actor - Recognized as leader in environmental care (in and out of operations) - Acknowledged ally in the solution of water problems in four provinces Promote active engagement of our employees in community activities to encourage water and environmental protection. Establish transparent participation mechanisms of the company in public and private partnerships in projects aimed at improving water availability and management. Support completion of water projects for Cajamarca City and disseminate Yanacocha s contribution. Reinforce the participatory monitoring processes. Implementation of communication campaigns to promote water protection in Cajamarca. Support family water reservoirs construction in partnership with the communities of Cajamarca, Celendin, Hualgayoc and San Pablo provinces. 3

4 Engage media representatives in the environmental and water monitoring activities. Transparent and Credible - Viewed as having visible, friendly and credible faces in the community. - Communicates and reports in a systematic, direct and appropriate manner with the community. - Acknowledged for upholding direct and transparent communication Communication program to inform of the status of compliance of commitments. Leadership team participates in public events and speaks on topics relevant to the company. Generation opinion streams (civil organizations, media, and universities) to reinforce legitimacy of private investment, development and democracy. Monthly meetings with stakeholders to strengthen relationships and inform status of operations. Encourage and organize stakeholders to visit our operations and projects. Interviews with different actors of Cajamarca to seek feedback on our progress with Legitimacy. Legitimacy Component Key Actions Internal Engagement Institutional Engagement Community-based Engagement Respectful of Cajamarca Sensitive to the historical patterns of companycommunity relationships as expressed in the community s perception about company employees as aloof to local needs, the main intention of our recent actions is to cultivate our awareness and empathy to such community needs. The messages from our senior leadership team have openly acknowledged opportunities for Yanacocha to improve in this regard, and have stated the desire to build on a foundation of respect and trust. Development Partner for Cajamarca This component views development not only as community investment, but also as an opportunity to demonstrate our commitment to inclusiveness through engagement with authorities and community members to articulate existing community capacities and assets with local and national government resources and with other private companies, contributing thus to the creation of shared value and the establishment of a sustainable development framework. Water and Environment A responsible actor Environmental and water management are key aspects of our business and thus extreme care is taken to have the policies and processes in place to ensure solid water and environmental stewardship. Toward this end the company is Engaging our Employees socialization of social engagement plan Engagement with civic and professional organizations Fulfillment of Commitments Leaders of Knowledge Program La Encañada Dialogue Table Banos del Inca Dialogue Table Engagement with Central Government Celendin Forestry Projects River Ronquillo -Santa Apolonia Water Treatment Plant Project Complaints and Grievance Mechanism Commitment to Build the Quinuapampa-Lagunas de Combayo Road Cattle Development Project - Quengorío Alto Hamlet Improvement and Lining of Canals in Conga Area of Influence Construction of Chailhuagon reservoir 4

5 actively engaging the rural and the urban communities to contribute to the management of water and the environment. This is so through high standards and practices within our operation and through fostering community participation in the water quality monitoring; in the city, the company has partnered with the local water company and the Municipal Government to improve the supply of water through projects benefiting the city; the company also participates in Water Associations, as a respectful actor of the local culture and participative processes. Transparent and Credible The focus of the re-engagement with the local community is to build relationships to generate frequent, meaningful, and open communitycompany communication; this includes civil society organizations, authorities, opinion leaders, journalists and employees. Engagement with the Chamber of Commerce of Cajamarca Introduction of Yanacocha Senior Management to the Municipality of Cajamarca Engagement with Grass-roots organizations Introduction of Yanacocha Senior Leadership Team to the Community of Cajamarca Visit Program Chailhuagón Reservoir PROGRESS TO DATE Respectful of Cajamarca 2013 Progress Engagement with Civic and Professional Organizations The aim of engagement is to encourage employee involvement in community, professional, cultural and civic organizations. Company leaders and employees have established relationships with eight local professional associations representing Engineering, Economic, Accounting, Sociology, Nursing, Pharmaceuticals, Chemistry and Law. These efforts begin to link employees with their professional peers to share information about Yanacocha in face-to-face events, formal presentations, and forums. Leaders of Knowledge Program The Leaders of Knowledge Program aims to make meaningful contribution to education. Yanacocha has partnered with local educational institutions to promote a school contest in which 34 schools from San Pablo, Celendín, Bambamarca and Cajamarca provinces participate. In June, 700 students, teachers and parents attended the inaugural ceremony and the program continues to develop. Grievance and Complaints Mechanism The Grievance and Complaints Mechanism has been established as an avenue for individuals to voice concerns or raise questions related to Yanacocha s performance. The mechanism collects grievances directly from the area of influence and through the Cajamarca Public Service Office it facilitates a grievance resolution and then communicates outcomes. Recently, the various mechanisms previously established by Yanacocha have been unified and streamlined to ensure that contact with the rural and 5

6 urban areas is more responsive. In addition, we are working to increase engagement with local and national institutions interested in our grievance acknowledgement and resolution process. Engaging our Employees As part of the effort to engage our employee with the company goal of recovering legitimacy in Cajamarca, the leadership team conducted a full week of meetings with the employees. During these meetings the leadership team presented the company s social engagement plan to more than 2000 employees focusing on the important role of each employee. This interaction also allowed the employees to present suggestions and initiatives on how to support the social strategy and how to become more responsible citizens. A Development Partner for Cajamarca 2013 Progress Dialogue Tables The company has continued active participation in a number of Dialogue Tables which facilitate ongoing dialogue with local actors including the government and the communities by engaging in open discussions about community development, and listening to their social and environmental concerns. The La Encañada Table was established after the November 2011 protests against Conga. The Table resumed during the first quarter 2013 and after four dialogue sessions a participative work agenda was agreed to further community development efforts based on their needs and the fulfillment of our commitments. Similarly, in the Baños del Inca Table we are continuing our effort to reestablish a constructive and respectful dialogue with Municipality of Baños del Inca and other districts. Engagement with the Central Government The objective of engaging with the Central Government is to maintain a fluid communication channel to reinforce the interest of the company in building a long term business in Peru while at the same time keeping the Central Government aware of all the efforts that the company is doing to reestablish a good and constructive relationship with Cajamarca. Fulfillment of Commitments Our community investment efforts are channeled through the implementation of commitments and voluntary contributions to development projects. Both work streams result in community benefits. Celendín Forestry Project The Celendin Forestry Project is part of the social development program designed to generate alternative economic activities and is being implemented in the Conga area via the Asociación Los Andes de Cajamarca (ALAC) through an agreement between ALAC and the Foundation for Agriculture Development. As of mid-april 2013, more than one million trees have been planted in the Huasmín district, Celendín. Also, 114 community members from Huasmín, Sorochuco and Celendín were trained as forestry promoters. 6

7 Commitment to Build the Quinuapampa-Lagunas de Combayo Road Yanacocha completed approximately 6 km of road from Combayo to Quinuapampa in the Conga area of influence. The road will enable transportation and trade between the populated centers of El Tambo, Chanta, and Combayo. Cattle Development Project - Quengorío Alto Hamlet The project was implemented to improve the quality of animal husbandry. As a result, 80 farmers from San Nicolas in La Encañada will benefit from an investment of S/. 170,000 enabling improved production and quality of cattle feed sources. Water and the Environment 2013 Progress River Ronquillo -Santa Apolonia Water Treatment Plant Project The rapid increase in population in the last two decades has rendered existing water distribution infrastructure insufficient. To alleviate this issue, Yanacocha has committed to fund seven projects (S/. 27 million) to improve the capacity of potable water supply in Cajamarca. The Santa Apolonia Water Treatment Plant will allow an increase in water supply from 64 to 80 liters per second going into the Santa Apolonia Water Treatment Plan and will benefit approximately 150,000 people. In June, the local media widely covered the news highlighting this contribution as the result of the joint work of the Municipality of Cajamarca, the Local Water Treatment Company (SEDACAJ), ALAC, and Yanacocha. Improvement and Lining of Canals in Conga Area of Influence Yanacocha has continued supporting the improvement of rural water infrastructure through the improvement of five irrigation canals and the construction of 26 micro-reservoirs in the Conga area. Improvements will allow permanent irrigation for agriculture and animal husbandry. Local media coverage has acknowledged these contributions in benefit of the rural communities and has also underscored the engagement of senior management in the opening ceremonies of such projects. Construction of Chailhuagon reservoir The company completed the construction of the Chailhuagon reservoir located in the Conga area in July This is the first of the four reservoirs that the company has committed to build and put into operation as part of the water first approach for Conga. The reservoir was constructed using a local workforce and will provide year round water for the communities located downstream of the reservoir. Transparent and Credible 2013 Progress Introduction of Yanacocha Senior Leadership Team to the Community of Cajamarca In the first quarter of 2013, Yanacocha presented its new Leadership Team to Cajamarca and the national press. The new team led by Todd White, Senior Vice president Operations South America and 7

8 Javier Velarde, Vice President and General Manager of Corporate Affairs acknowledged the need to improve Yanacocha s relationship with Cajamarca and expressed the company s intent to actively listen to community concerns and to re-build the relationship with local authorities and civil society. Moving forward, the senior leadership team is to be based in Cajamarca to increase their interaction with the community. Yanacocha also provided an operations update and communicated the changes in the new community engagement approach with emphasis on transparency, continuous communication, and review of its internal processes and policies to find opportunities for improvement in the quality of engagement. Yanacocha also discussed the suspension of the construction of mining facilities to focus solely on construction of Chailhuagón reservoir to benefit the communities in the Conga area of influence. Engagement with the Chamber of Commerce of Cajamarca Similarly, the Senior Leadership team met with the Chamber of Commerce of Cajamarca to listen to their concerns and suggestions about opportunities for local entrepreneurs in Yanacocha. They also discussed the need to increase local companies competitiveness and transparency in the contracting process. As a result, Yanacocha committed to work with the Chamber of Commerce to increase transparency, local contracting opportunities and local competitiveness and a work agenda was established to guide the joint effort. As a result of this joint effort between the Chamber of Commerce and Yanacocha, a number of companies have been able to obtain contracts and business opportunities with Yanacocha, several of them for the first time. Introduction of Yanacocha Senior Management to the Municipality of Cajamarca In line with its announced approach of openness and transparency, Yanacocha's new leadership team met with the Mayor of Cajamarca and provided a status update of Yanacocha and discussed the new engagement approach with the citizens and institutions of Cajamarca. Yanacocha expressed its intention and commitment to continue building a transparent relationship with Cajamarca and to continue contributing to the sustainable development of the region in conjunction with local actors. Visit Program Chailhuagón Reservoir In alignment with our current communication approach the company organized a site visit to the completed Chailhuagon Reservoir in July. Through this site visit program, thousands of visitors from rural and urban areas, along with authorities, universities students, journalists, etc. were be able to visit the reservoir and verify the benefits the reservoir provides for downstream users. Engagement with Grass Roots Organizations Starting in the first quarter of 2013, Yanacocha has emphasized a face-to-face engagement approach with grass roots organizations such as parent s associations in schools, social support programs such as Vaso de Leche (Glass of Milk), the Juntos Program and Rondas Campesinas. This has allowed Yanacocha to communicate more effectively the benefits of mining and of the Conga project, its legitimacy approach and it has also allowed it to strengthen its relationships with local community-based groups. 8

9 Summary Our consideration and analysis of Yanacocha s history, and the feedback from community and from studies such as the CSRM Listening Study have enabled Yanacocha to reflect on the nature of community-company relationships and to shift its community engagement approach from short-term viability to long-term relationship building. This resulting legitimacy approach with its four components is the framework to guide the company s change efforts. Our intention is to continue seeking opportunities to build our relationships with the local community and to ensure that our organizational processes support such efforts. Toward this approach we have initiated an organizational change process, as reflected in the changes in our senior leadership team, who in turn have actively re-engaged with local authorities, institutions, civic organizations and community individuals to openly acknowledge past mistakes and to ask the community to work together in mending our relationship. The leadership team has also communicated the suspension of work in the Conga project to shift focus only on the construction of reservoirs in benefit of the surrounding communities in alignment with our water first policy. Additionally, we have further engaged the members of the community and intend to continue being receptive to their concerns and maintain continuous dialogue. Lastly, we reiterate our desire to continue our focus on legitimacy by executing our actions in each one of the components outlined in this report. It is our desire to be recognized by the community as: 1) respectful of Cajamarca, 2) a partner for its development, 3) a responsible actor in water and the environment, and 4) transparent and credible. We ask of the community to hold us accountable for engaging and working collaboratively in the achievement of an improved and value-creating relationship. 9