Community

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A number of targets were set in relation to the community-related activities of the group in the Report to Society 2004.

Structure and governance

Community-related matters are addressed at Board level, under the auspices of the safety, health and sustainable development committee which has within its remit the evaluation of social, economic, environmental and health impacts of the company's operations on local communities. The committee comprises four non-executive directors - Bill Nairn (chairman), Dr James Motlatsi, Dr Sam Jonah and Simon Thompson - as well as two executive directors - Bobby Godsell (CEO) and Neville Nicolau (COO Africa).

In South Africa, community and social development is managed under the auspices of the Sustainable Development Unit which was set up during the year. The company's South African corporate social investment programme is overseen by the AngloGold Ashanti Fund and Trust. The fund is managed by Tshikululu Social Investments (TSI), a non-profit organisation, which manages a number of other company funds. The fund is directed by a Board of Trustees which in turn is supported by local area committees at the operations, which are close to and can be responsive to the more immediate needs of the community.

Outside of South Africa, community issues are managed as an integral part of operations, frequently with dedicated community relations and social development personnel in place, and often in association with non-governmental organisations (NGOs).

The discussion that follows reports on the company's community-related performance in line with the company's business principles (in orange below).

AngloGold Ashanti's aim is to have a positive impact on the people, cultures and communities in which it operates. Accordingly, AngloGold Ashanti will be respectful of local and indigenous people, their values, traditions, culture and the environment

Exploration and mining activities frequently occur in remote areas or regions where there is very little other economic activity and, because of this, their relative impact is often heightened. These impacts need to be considered at the exploration stage, right through to operation and eventual closure. A range of potential impacts and mitigating measures are identified during the Environmental Impact Assessment (EIA), and mitigating measures are then incorporated into the Environmental Management Plans (EMPs) over the operation's life-of-mine.

In addition to the guidance provided by the company's values and business principles, the group's relationships with communities are often guided by operation or region-specific community policies.

For example, many legal requirements exist in relation to minimum standards for exploration and mining activities in Australia and are reflected in standard operating practices. Sunrise Dam's Community Policy was reviewed in 2005 and a new Community and Stakeholder Engagement Procedure was put in place whereby all community projects and requests are evaluated by a small group of managers and recommendations are made to the management team.

The United States too, is a highly regulated environment where the legal regime covers, among others, indigenous people, archaeological and cultural resources. Permitting procedures for any new developments or expansions are thus rigorous.

The South African socio-political landscape is governed by a range of legislation; the most critical to the mining sector is the Mineral and Petroleum Resources Development Act (MPRDA) which requires that all mining operations submit and adhere to a Social and Labour Plan as a prerequisite to the granting of new order mining rights. AngloGold Ashanti was granted these conversions in respect of all of its operations in August 2005. (See case study: AngloGold Ashanti granted new order mining rights.)

Elsewhere in Africa, region-specific policies are in place. In Ghana, for example, guidelines for community relations have been set by the local Environmental Protection Agency (EPA) and the Mines Inspectors' Department. Close contact is maintained with the chiefs and traditional authorities, including paying homage - particularly to the Asantehene, the king of the Asante - at significant events. Similarly, respectful relationships are maintained with the District Heads in Ghana and Tanzania and the Prefecture in Siguiri and Mali.

We will strive to ensure that surrounding communities are informed timeously of, and where possible, are involved in developments which affect them, throughout the lifecycle of our operations

The necessity for, and the process of, informing communities timeously of any developments and maintaining their involvement throughout the operational life cycle are enshrined in the law of many of the countries in which the group operates. This communication becomes especially important as operations, or portions of operations, reach the end of their economic lives.

At Bibiani in Ghana, for example, the mine engages regularly with the local District Assembly Committee and has taken steps to inform community members about its activities though the local radio station and at periodic community engagement meetings. Based on current estimates, the mine is due to close in 2007.

At Siguiri in Guinea, stakeholder engagement takes place at many levels, from local community members (whose main concerns relate to environmental issues and job creation) to the prefecture and various district committees, to the Representatives of Elders, to national government. Community social investment issues are dealt with by the Prefectural Council for the Development of Siguiri (PCDS), which is overseen by an international NGO, the Centre Canadien d'étude et de co-opération internationale (CECI).

Stakeholder identification and engagement is formalised under the National Environmental Policy Act in the United States when public lands or federal permits or approvals are involved. Other community outreach processes include local land use planning and state permit hearing processes. The life-of-mine plans are well documented and communicated to stakeholders on a regular basis.

In South Africa, community involvement and interaction with local, regional and national authorities is extensive and ongoing and forms an integral part of the company's Social and Labour Plans and other commitments made in terms of the MPRDA. Regular interaction occurs with community stakeholders through local chambers of business, the AngloGold Ashanti Fund local area committees and various community and charity forums. An area of focus during the year has been the incorporation of mine villages into local townships and the opportunities for development presented by the FIFA 2010 (football) bid. Issues that cannot be resolved at the established committee level are elevated to the mayoral committee for resolution.

A number of programmes are in place for interaction with community representatives, local development agencies, other companies, municipal authorities, district associations and others in Brazil and Argentina. Apart from a call centre for the registration of community complaints and requests, communities are kept informed about operational developments, particularly life-of-mine plans, through frequent meetings and bulletins. In Brazil, a so-called 'good neighbourhood' programme involves regular meetings with community members to identify and deal with potential conflicts. The company participates in municipal and state environmental councils and regularly hosts visits to company properties. Any new mining projects are presented to community leaders and opinion leaders for comment and to discuss compensatory measures.

At Cerro Vanguardia in Argentina, the company engages regularly with local authorities, several social and sporting organisations, schools and universities. Local communities are kept informed through periodic meetings. The company participates in forums promoted by the local towns, such as local development agencies. A communication plan addressing mine closure issues has been developed and will be implemented in the future.

Extensive stakeholder engagement structures exist at operations in Mali, Tanzania and Namibia. A joint Public Consultation and Disclosure Plan (PCDP) was developed for the Sadiola and Yatela mines in Mali and has proved to be a useful tool in engaging with stakeholders. An all-inclusive stakeholder committee is the main vehicle for stakeholder consultation and grievance resolution. The committee includes both traditional village leaders, as well as local and national government officials.

Navachab recently re-examined its stakeholder engagement processes. An interested and affected parties' meeting is held on an annual basis, with a mine tour, presentations and an opportunity for discussion provided. Issues discussed include environmental impact issues, sustainable development and mine closure. The mine also plays an active role and has representation on a number of local committees and the town council.

In Ghana, monthly meetings are held with consultative committees generally comprising the traditional chiefs or heads of the community, community elders, a female community leader, a youth representative, representatives from NGOs and representatives from the district authority. At Iduapriem a Stakeholders Advisory Group is currently being set up to moderate between the mine and communities on issues of conflict which have not been resolved at the Community Committee level.

In Australia, AngloGold Ashanti has developed formal communication strategies for managing and consulting with key stakeholders. Sunrise Dam is an active member of the Laverton shire and regularly hosts shire council meetings at the mine site. For aboriginal lands, annual community meetings are held to discuss current and planned mining activities and an annual report is presented to the community. Sunrise Dam also participates in annual state-wide Mine Open Days, which provide the opportunity for local and regional communities to visit the operations.

At the Boddington project, stakeholder engagement and community consultation has continued through monthly update newsletters, establishment of a free call line, expansion plan updates on the website and community information workshops in anticipation of the recommencement of operations at some stage in the future.

We will undertake social investment initiatives in the areas of need where we can make a practical and meaningful contribution. In particular, we will contribute to those areas of education and health care which are relevant to our business activities and those most likely to be sustainable once our operations have come to a conclusion in that community

In total, the group spent $8,752,407 on corporate social investment expenditure in 2005. Corporate social investment expenditure is defined as the voluntary investment of funds in the broader community, through programmes, which span a range of development and maintenance activities seeking to complement the work of government, non-government (NGO) and community-based organisations (CBOs), where the target beneficiaries are external to the company. Corporate Social Investment specifically excludes those activities which the company is legally obliged to undertake or where the purpose is exclusively commercial with no significant public/social good, such as purely marketing, employee benefits or public relations activities.

In Australia, a Community and Stakeholder Engagement Procedure has been developed to evaluate all community projects and requests for assistance. A range of projects were supported during the year including the development and publication of the 30-year history of the Wongatha Wonganarra Aboriginal Corporation. The history of this organisation has been recorded in a book entitled Willing People, and was launched by the Minister for Indigenous Affairs in August 2005. (See case study : Making a difference - Wongatha Wonganarra Aboriginal Corporation.) A long-time supporter of the Royal Flying Doctor initiative, the company is sponsoring the publication of the Royal Flying Doctor Service Safety and Survival Handbook.

The group's social investment initiatives in southern Africa are primarily undertaken by the AngloGold Ashanti Fund. In 2005, more than R18 million was distributed to a wide range of projects. The fund is managed by Tshikululu Social Investments (TSI), which is a specialist corporate donor support agency. The trustees of the fund consider proposals against a set of criteria, including the sector (education, health, arts and culture) into which a particular project falls, the location of the beneficiaries and the sustainability of the venture. The fund concentrates on education (60% in 2005) when support has great potential to make a real difference to the lives of individuals and their communities. Other areas to which the fund gives priority are those of welfare and development, HIV/AIDS, health and skills training and the development of business opportunities. Another guiding principle is to focus on the areas where the company has operations and the regions from which it draws large numbers of employees (and where the families of many of those employees live). (See case study : The AngloGold Ashanti Fund and Trust - contributing to sustainable projects in Southern Africa.)

Corporate social investment takes place at two levels in the United States. At the CC&V level, there are two funds for social investment - the first is administered by the Community Affairs Manager through the Community Affairs Committee, which makes recommendations on donation requests. The second is related to larger, community-related projects, aimed at creating sustainable projects for the future. Decisions on funding are made by the Community Affairs Manager, with the direction of the Vice President and senior management. At the second, Denver office level, the regional funds for social investment are directed at areas beyond the local area surrounding CC&V in Colorado. Donations are aimed at supporting institutions and causes aimed at creating a social and political atmosphere that will allow the company to operate within Colorado.

In Brazil and Argentina, social investment initiatives are undertaken in communities surrounding current and past operations. The main areas of involvement are education, community development, health care, socio-economic development, sports and environment.

A socio-economic review of the area surrounding Morila mine undertaken by a local NGO ASERNI (Association d'Etude et de Mise en Valeurs des Ressources Naturelles et des Institutions) formed the basis for the establishment of a development foundation at the Morila mine in Mali, with a founding donation of $500,000 from Morila in 2002. The foundation will manage long-term sustainable development projects aimed at preparing communities for mine closure.

At Sadiola and Yatela in Mali, social investment is channelled through the programme implemented as a result of the Integrated Development Action Plan (IDAP). The funds set aside as part of this process are managed by an association which is independent of the company and includes representation from the stakeholder committee, the company and the IFC. The company has budgeted $508,000 to fund the association and its projects over a three-year period.

Social investment initatives in Namibia continue to focus on education, the development of agricultural projects and local economic development initiatives.

In Ghana and Guinea, social investment decisions are based on both need and the impact of the operation on the community (see box below).

The company will encourage its employees to make themselves available for participatory and leadership roles in community activities

A long-standing volunteer programme exists at CC&V in the USA, where employees are encouraged to be involved in the community through volunteer service. Employees are rewarded with one hour of paid time off for each three hours volunteered for community groups, and one hour off for each two hours volunteered for governmental positions, such as the City Council and Planning Commission. CC&V volunteers participate in activities ranging from Little League football coaching to assisting in local nursing homes, from volunteers to the fire departments to blood donation drives. Since inception CC&V employees have donated 2,500 hours of time per annum. In addition, company management at CC&V and the Denver office serve as volunteers on the boards of a number of regional or state-wide institutions and trade organisations.

In June 2005, Geita mine in Tanzania once again undertook the Geita Gold Mine Kilimanjaro Challenge Climb Against HIV/AIDS, with employees, suppliers, contractors and others climbing the highest mountain in Africa to raise funds for and create awareness of people with HIV/AIDS. The Geita orphanage was one of the primary beneficiaries.

In South Africa, a 'give-as-you-earn' and matched volunteerism programme - called Hearts of Gold - was initiated at the corporate office in 2004. About 60 employees participated in the programme in 2005, with close on R250,000 having been distributed as a result. (See Report to Society 2004.)

In Brazil, employees are encouraged to participate in the programme of volunteer work known as 'Holding Hands'. (See Report to Society 2004.) Currently several activities are in place including: computer and chess classes for needy children; English and literature classes for adults; and campaigns for the needy. Close on 100 hours in volunteer time was donated during the year.

The Australia region has policies and practices that encourage employees to participate in leadership roles in their local communities. This remains a challenge though owing to the fly-in, fly-out employment arrangements. Nonetheless, employees actively supported Red Nose Day, Shave for a Cure (Leukaemia Foundation), the Princess Margaret Hospital, the Royal Flying Doctor Service and the Red Cross Blood Bank on a state-wide basis. Local support continued to focus on the Laverton Fire and Emergencies Services Group, the Lake Carey Catchment Management Group, Asian Rhino project and the Perth Zoo.

Management and employees at the Ghanaian operations serve on a wide range of boards and advisory bodies, including the Kumasi Polytechnic, the Presidential Advisory Commission on Health, the Board of Governors of the University of Mines and Technology at Tarkwa and various other schools, churches/mosques, youth organisations and sporting clubs. At Iduapriem, an outreach team is being formed for interested employees to voluntarily teach mathematics, general science and civic education in schools in the communities, most of which lack qualified teachers.

We will seek to acquire and use land in a way which promotes the broadest possible consensus among interested people. Where involuntary resettlement is unavoidable, we will abide by appropriate guidelines for resettlement, where they exist, and in any event will work with the local communities to develop workable plans for any resettlement which may be necessary

In 2004, the board committee on safety, health and sustainable development ratified the International Finance Corporation's (IFC) Resettlement Policies, Guidelines and Standards on Involuntary Resettlement for all resettlements undertaken in future. The policy is intended for all managed operations, including joint ventures, and will be reviewed as necessary.

While no new involuntary resettlements have taken place in Ghana in the past two years, the Obuasi mine has paid (to date) more than ?700 million (approximately $78,000) for the properties, farmland and crops affected in Obuasi and surrounding communities. The mine pays monetary compensation based on guidelines provided by the Ministry of Mines and the Land Valuation Board.

At Iduapriem, most of the farmers due for compensation for loss of cropland due to the extension of a rock dump have been paid, except the 35-member Concerned Farmers Association. The matter is before the courts for settlement at the instance of the farmers. Local consultants have been employed to streamline and expedite the payment of compensation at the mine. A Stakeholders Advisory Committee, headed by an independent chairperson, has been established. Finding a resolution to these issues is a core focus of management and the process is being overseen by the IFC who are a joint venture partner at the mine.

Resettlement has been carried out in three communities around AngloGold Ashanti Mineração in Brazil over the past three years with the aim of moving those families living around tailings dams or those within perceived risk areas. As this process commenced prior to the company adopting the IFC policy, the process is being managed in terms of Brazilian legislation.

Negotiations take place with residents in terms of the following procedure:

• three separate real estate evaluations are undertaken to determine the market value of the property;
• financing of plots of land at reasonable prices and assistance in purchasing building materials so that the residents can build new houses; or
• donation of plots at locations agreed with the residents, with the company undertaking the construction of the house.

Families living in areas adjacent to the tailings dam at Mina D?Àgua have been resettled. The resettlement of 22 families who lived in the area below the tailings dam at Galo has largely been completed, with only one family who, regardless of the risks involved, are reluctant to move. Negotiations continue in an effort to find an appropriate alternative. A total of 23 families living in risk areas sold by the company at least 50 years ago (at Vista Alegre) are being resettled. Indemnification of the company or donation of plots and construction of houses at a single location has been negotiated with the families. There are still three families to be reallocated.

We will strive to contribute to the sustainable economic development of host communities through procurement activities; the contribution of redundant assets to the community; assistance in the establishment and growth of small - to mediumsized sustainable enterprises; and the outsourcing of goods and services from local vendors where appropriate

A fundamental philosophy of the group is that its operations and activities should contribute toward the long-term sustainable development of host communities. This is particularly challenging for sometimes short-lived mining operations or exploration projects, particularly when there is a short window of opportunity to make an impact. A number of ways in which this can be achieved, however, are:

• support through local procurement activities;
• the contribution of redundant assets to the community;
• assistance with the establishment and development of small- to medium-sized sustainable enterprises; and
• the outsourcing of the provision of goods and services to local vendors where appropriate.

Cerro Vanguardia in Argentina contributes to the development of the nearby town of San Julian through the creation and support of a Local Development Agency. In Brazil, the company supports a Dressmakers' Co-operative (see Report to Society 2004) and the manufacture of brooms from recycled materials (see box below) amongst other initiatives.

The local Development Agency, founded in 1995, continued to attract development to the Nova Lima area. (See Report to Society 2004)

Preference is being given to recruiting people living in the Sabará, Nova Lima, Raposos and Crixás regions and other towns adjacent to operations. Contractors have also been instructed to make use of local labour during the mine and plant expansion phase.

In South Africa, AngloGold Ashanti has played a role in stimulating economic growth by developing small business enterprises. The Small and Medium Enterprise Development Initiative (SMEDI) identifies people, mainly historically disadvantaged South Africans who have ability or potential, and enters into a partnership with them to provide education, capacitybuilding and funding with the long-term aim of creating self-sustaining businesses. The raising of venture capital is provided through Masakhisane, which was set up with initial capital of $1 million in 1998 (about $1:R7 at the time). Particular efforts have been made to promote the company's black economic empowerment (BEE) expenditure targets and as a result, the company's BEE expenditure in 2005 rose to about R1 billion.

In 2005, SMEDI assisted 14 new businesses, investing some R462,500. 60 new jobs were created. SMEDI's total portfolio includes 35 active small and medium enterprises (SMEs) with investments totalling R1.35 million from Masakhisane. In total, 311 people are employed at these businesses. Since its establishment 1,205 jobs have been created.

In Australia, the company has continued to provide opportunities to local indigenous communities to provide services and encourages contractors to do the same. A Supply Day initiative was launched in 2004 and was continued in 2005. This initiative targets local indigenous communities with the objective of providing a forum to identify opportunities to tender on supplies and services. The company also works closely with Indigenous People in Mining, an industry and government network that fosters opportunities for aboriginal people within the mining industry.

At Obuasi in Ghana, about 12% of the company's material requirements are sourced from local businesses. Transportation of mine material is handled by local private companies, as is the transportation of workers to and from work. Foodstuff and drinks procured for employees' club houses and canteens are sourced from locals. (See box below: Local economic development in Ghana and Guinea.)

A total of 32 polytechnic and technical school graduates (40% locals) were admitted to the Obuasi apprenticeship programme. Most of them are undergoing a one-year practical training programme in plumbing, welding, electrical, mechanical and electronic engineering. The four-year old programme has benefited more than 200 people, most of whom come from the communities around Obuasi Municipality. Practical training is given to the beneficiaries. In addition, the mine provides free accommodation and allowances to beneficiaries while in training. To date about $54,000 has been spent on the programme which is over and above the social investment figure of $266,206. As part of its social programme to assist in the development of education in the Obuasi Municipality, the Obuasi mine also donated 12 computers and accessories to the Len Clay School (valued at approximately $4,500).

The 'Hand-in-Hand' Programme at Iduapriem (see case study : Hand-in-Hand programme provides alternative livelihoods at Iduapriem in Ghana) is geared towards the enhancement of economic and social conditions of the communities through capacity-building, the provision of micro-credit finance and the establishment of economic activities such as agriculture, animal husbandry and other small scale economic activities. More than 350 people have benefited from the programme, at a cost to the company of $268,000. More than 100 people are involved in supplying hardware, stationery, wood products, and services during the year, at a cost to the company of approximately $290,000.

The CC&V mine in the USA is not situated in a 'developing region' and, therefore, the company's economic support is aimed at supporting existing local businesses. The mine is located in the vicinity of two towns: Cripple Creek and Victor. The town of Cripple Creek has a vibrant economy based on gambling and is not dependent on CC&V. The town of Victor, on the other hand, requires the support of the mine which is provided in a number of ways: including purchase of water from mining operations; leasing property and office space; support for the local Lowell Thomas Museum, and the like.

Artisanal mining

The issue of artisanal mining poses substantial challenges for mines operating in areas with long traditions of artisanal mining. This includes most mines in Ghana, Guinea and Tanzania. AngloGold Ashanti has begun working closely with a number of other stakeholders in addressing how best to find a balance between its own commercial interest in its mining concessions and the small-scale miner's claims. (See case study in the Labour section: Understanding and working with artisanal miners in Africa.) Artisanal mining remains a safety, health and environmental concern (to employees and artisanal miners) that needs to be managed. Furthermore, the company's security arrangements are under ongoing review to ensure that human rights considerations are fully factored into all dealings with the artisanal miners and all parties concerned. Again, in this area, stakeholders have to ensure respect for the law while simultaneously making certain that human rights are not transgressed.

At Siguiri in Guinea, the threat of artisanal miners encroaching on mine property is high, particularly as mining has advanced to within close proximity of traditional artisanal mining areas.

A policy is in place with regard to the treatment of artisanal miners by security personnel. Specifically, any illegal miners detained by security personnel must be handed over to the local authorities as soon as practically possible to allow for the legal process to take its course. Also, the mine communicates with artisanal miners and community members with regard to safety and health. Despite this, an artisanal miner was fatally injured on mine property during the year when a pit wall he was illegally working in collapsed.

At Obuasi too, the issue of unlawful artisanal mining on company property has become a significant issue. These miners have become a substantial problem for the company and while the company is making ongoing attempts to engage with the artisanal miners to stay out of the lease area, while at the same time protecting its property, clashes between the artisanal miners and the company resulting in injuries to both groups have occurred and remain of concern to the company.

There have been instances of artisanal mines encroaching on the company's lease areas at Morila in Mali and Geita in Tanzania. In both countries the situation is better resolved with the assistance of the relevant government departments and other stakeholders.