Collahuasi and ISO 26000: Towards excellence in sustainability

Regina Massai C. Bernardita Fernandez B.

October, 2011

Authors
Regina Massai (Ingeder Consultores, Chile) Bernardita Fernndez (Compaa Minera Doa Ins de Collahuasi, Chile) Alberto Guajardo (Excelencia y Gestin, Chile) Hernn Blanco (Consultant, Chile)

General Objetive
To examine Collahuasis policies and practices in the light of ISO 26000 and put forward recommendations for improving the companys performance in the field of Social Responsibility

The aim of this work is to collaborate in improving practices, strengthening those already in place and raising the general level of sustainability performance.
Note: this process using ISO 26000 started in 2009 prior to the Standards final approval, FDIS (final draft international standard version)

Why ISO 26000?

There has been a number of high-level declarations of principle related to SR and, there are many individual SR programmes and initiatives. The challenge is how to put the principles into practice and how to implement SR effectively and efficiently when even the understanding of what social responsibility means may vary from one programme to another ISOs expertise is in developing harmonized international agreements ISO standards are worldwide well recognized The membership of the ISO/WG SR was the largest and the most broadly based in terms of stakeholder representation of any single group formed to develop an ISO standard. ISO 26000 will distil a globally relevant understanding of what social responsibility is and what organizations need to do to operate in a socially responsible way.

WHAT IS ISO 26000?

Is an ISO International Standard giving guidance on Social Responsibility (2010). It is intended for use by organizations of all types It will assist them in their efforts to operate in the socially responsible manner that society increasingly demands to contribute to sustainable development. It is consistent with and complements relevant declarations and conventions by the UN and its constituents. ISO 26000 has established Memorandum of Understanding with ILO to ensure consistency with ILO labour standards, with the United Nations Global Compact Office (UNGCO) and with OECD to enhance their cooperation on the development of ISO 26000. contains voluntary guidance, not requirements, and therefore is not for use as a certification standard like ISO 9001:2008 and ISO 14001:2004.

Definition of Social Responsibility responsibility of an organization for the

impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that
contributes to sustainable development, including health and the welfare of society; takes into account the expectations of stakeholders ; is in compliance with applicable law and consistent with international norms of behaviour ; and is integrated throughout the organization and practised in its relationships

Note: Relationships refer to an organization's activities within its sphere of influence

Source: ISO 26000:2010

Schematic Overview of ISO 26000

Clause 1

Scope
Guidance to all types of organizations, regardless of their size or location Clause 2

Two fundamental practices of social responsibility Social responsibility core subjects

Human rights

Clause 5

Recognizing social responsibility

Stakeholder identification and engagement

Terms and definitions

Definition of key terms Clause 3

Sustainable development

Maximizing an organizations contribution to

Organizational governance Fair operating practices

Clause 6
Community involvement and development

Labour practices

The environment

Consumer issues

Understanding social responsibility

History and characteristics; relationship between social responsibility and sustainable development

Related actions and expectation

Clause 4

Integrating social Clause 7 responsibility The relationship of an organizations Understanding the social responsibility throughout an characteristics to social responsibility of the organization organization Practices for integrating social responsibility throughout an organization

Principles of social responsibility

Accountability Transparency Ethical behaviour Respect for stakeholder interests Respect for the rule of law Respect for international norms of behaviour Respect for human rights

Communication on social responsibility

Voluntary initiatives for social responsibility

Reviewing and improving an organizations actions and practices related to social responsibility

Enhancing credibility regarding social responsibility

Bibliography: Authoritative sources and

additional guidance

Annex: Examples of voluntary initiatives

and tools for social responsibility

SR Core Subjects
Holistic approach
6.8.
Community involvement and development

ISO 26000 include:

6.3. Human rights

7 Principles and 39 expectations 7 SR Core Subjects with 36 Issues to identify the main impacts on society and the environment 288 Expectations or related actions

6.2 Organizational
6.7. Consumer issues ORGANIZATION governance 6.4. Labour practices

6.6. Fair operating practices

6.5. The Environment

Interdependence

Key steps on an SR process within ISO 26000 framework

Recognising Social Responsibility: an organisation should understand and recognise how its decisions and activities impact society and the environment and how stakeholders interests are affected by the organisation. Identifying and engaging with stakeholders Identifying an organisations sphere of influence in the value chain: when assessing its sphere of influence and determining its responsibilities, an organisation should exercise due diligence to avoid contributing to negative impacts through its relationships. Gap Analysis and Action Plan Integrating social responsibility throughout an organization

METHODOLOGY

ISO 26000
(expected behaviour)

Collahuasis policies, principles and values

Maximizing contribution to sustainable development

Practices in force at Collahuasi

Interviews with key stakeholders Information relating to Collahuasis management system was reviewed along with the recommendations established in Clause 7 of ISO 26000 (Integrating SR throughout an organisation)

RESULTS AND DISCUSSION

Overview of ISO 26000 SR principles and Collahuasis related policies (examples)

ISO 26000 principles of SR Accountability Transparency Ethical behaviour Respect for stakeholder interests Summary of Collahuasis policies related to ISO 26000 principles of SR Sustainable Development Policies (SDP): Energy SDP: Community Relations and Corporate Affairs, Environment, Water Resources and Energy Efficiency/Climate Change People Policies (PP): Ethics and conflicts of interest SDP: Community Relations and Corporate Affairs PP: Human Resources, ethics and conflicts of interest SDP: Community relations and corporate affairs (Business Policies (BP): Contractual issues SDP: Workplace safety and health, environment, water resources and energy efficiency/climate change PP: Ethics and conflicts of interest BP: Quality and contractual issues No explicit policies. However, the measures taken as regards ILO Convention 169, taking into account the interests of indigenous peoples in the companys area of influence, and its progress in practices related to the mitigation of climate change would be good examples of practice of this principle. Signing of the UN Global Compact and Transparency International organisations Code of Conduct; adherence to ICMMs principles, related to sustainability, and UN Human Rights Convention PP: Human resources As in the previous point, the companys measures in the framework of Convention 169 point in the direction of this principle. Adherence to UN Human Rights Convention.

Respect for rule of law

Respect for international norms of behaviour

Respect for human rights

Collahuasis policies on people and SD and their relation with ISO 26000 core subjects and issues (examples)
Collahuasis policies SDP: Environment ISO 26000 core subjects and related issues of SR Environment: prevention of pollution; sustainable resource use; protection of the environment, biodiversity and restoration of natural habitats Environment: sustainable resource use Environment: sustainable resource use; climate change mitigation and adaptation Examples of recommendations Deepen the precautionary approach principle, ensure monitoring that provides transparent information in case of community complaints about water resources, strengthen second-generation monitoring (which identifies cause-effect relations). Establish targets/undertakings for reduction of GHG emissions and involve suppliers and contractors in measures. Verify emphasis of community initiatives on vulnerable groups and indigenous communities; verify method for determining relevance, scope and effectiveness of social investment programmes and their real impact on the communities; check current lines of social investment against the expectations and needs most felt by the community.

SDP: Water resources SDP: Energy

SDP: Community relations CI&D: community involvement; social investment and Corporate affairs Fair practices: responsible political involvement Governance: decision-making process and structure

Collahuasis policies on business and their relation with ISO 26000 core subjects and issues of social responsibility (examples)
Collahuasis policies Quality Contractual issues Risk administration ISO 26000 core subjects and related issues of SR Governance: decision-making process and structure Consumer issues Labour practices: conditions of work and social protection Fair practices: promoting SR in value chain CI&D: wealth and income creation Examples of recommendations Review conflict resolution mechanisms. Identify and train key employees in negotiation processes to face potential areas of disagreement between the parties (as facilitators and agents of change). Review risk administration policy and related processes under the due diligence approach so as to progressively integrate risks related to different SR subjects, in particular in human rights and the environment. Evaluate the organisations sphere of influence in order to avoid contributing to the negative impacts of organisations with which it relates and exercise a significant influence.

ISO 26000 as a way of pursuing sustainability at the company level

For companies today, translating the concept of sustainable development into their daily activities is an important challenge. However, what this preliminary gap analysis exercise with ISO 26000 has shown in the case of Collahuasi is that ISO 26000 makes a significant contribution as a conceptual framework that is broad and comprehensive enough to highlight the issues to which a company needs to pay attention on its road to sustainability. In other words, sustainable development should be embedded in the DNA of an organisation and of the people that operate its different areas. The first phase of this study focused on systematising the results of the preliminary gap analysis comparing ISO 26000 with the companys performance in areas related to the SR core subjects and recommendations.

ISO 26000 as a tool for facilitating design and implementation of a management system that safeguards sustainability

Collahuasis integrated management system and SR

The company has an Sustainable Management and Risks System (SGSR) committee that has foreseen the opportunity to integrate ISO 26000 with the certifiable ISO 14001, ISO 9001 and OHSAS 18001 standards already used by the system. According to ISO 26000, credibility with regard to certain issues can sometimes be enhanced through participation in specific certification schemes. To date, there is an initial proposal for the development of a fully integrated management system, studied from the perspective of managing stakeholder needs, with ISO 26000 as its inspiration but also taking into account the traditional systems (Abrahamsson et al., 2009)

SGSR
For integrated SR management, it is imperative to improve internal communication and coordination between the different company divisions related to SR core subjects, given their interdependence. The organisational governance core subject is, in fact, the thread that runs through and connects the integrated management system, bringing together the different inter-related SR core subjects. At the operational level, SR core subjects and divisions can, for example, be associated according to: Labour practices (Human Resources Division), Environment (Environmental, Energy and Strategic Supplies Divisions), Community involvement & Development (Corporate Affairs and Community Relations Divisions) and Fair Operating Practices (Procurement and Contracts Division).

SGSR
Comparison of the requirements of quality, environmental and safety & occupational health systems shows their compatibility and equivalences with ISO 26000. ISO 26000 also emphasises stakeholder identification and engagement as a key SR practice where this is understood as a process of two-way dialogue that provides the organisation with feedback for identifying issues such as its significant risks and impacts. Standards associated with traditional management systems do not necessarily draw attention to this aspect. According to ISO 26000 Stakeholder engagement can be a basis for involving stakeholders in the verification of an organization's claims concerning its performance. This should include community stakeholders but also suppliers and contractors.

ISO 26000 as support for designing and implementing risk analysis processes incorporating key sustainability variables
The most important opportunities that arise when a business actively attempts to apply criteria for its greater sustainability include the reduction of risk through the involvement of its stakeholders. (Crear Valor, 2006). Risk management is an important process for an organisations progress towards sustainability. Industry has vast experience in due diligence processes for environmental, safety and financial risks and this approach can also be used in the case of SR. ISO 26000 recommends the due diligence approach in general for integrating SR into an organisation but gives it special importance in organisational governance and, particularly, human rights. It also emphazises the importance of involving stakeholders in these processes.

CONCLUSIONS
This preliminary gap analysis indicates that ISO 26000 provides guidelines on SR which can help to structure and give consistency to an integrated company management system Sustainable Management and Risks System (SGSR) Part of the companys policies and practices are already aligned with ISO 26000 but this exercise also identified significant improvement opportunities One important identified opportunity relates to the strengthening of its management system and its broadening into an integrated framework consistent with SR. Systems that integrate SR are currently an important subject of debate.

CONCLUSIONS
The alignment of ISO 26000 with other relevant SR tools has been also a subject of debate recently. Collahuasi carried out pioneering work in aligning its 2009 and 2010 Sustainability Reports with ISO 26000 and this is being further reinforced in the preparation of its 2011 Report.

CONCLUSIONS
Risk management at Collahuasi will also be strengthened through the integration of SR into the companys strategy and regular practices using an ISO 26000-based approach, particularly as regards to key stakeholders such as the community in the area around its operations. The process of implementing SR is dynamic and continuous.

Gracias
rmassai@ingeder.com bernarditafernandez@collahuasi.cl