Puzzle #5 – Environmental/ Social Compliance
Protection of natural resources and the environment is a key objective of regulatory bodies in every region of the world. Though not a new item on the governmental agenda, environmental compliance by mining operations has continued to increase in stringency and now encompasses all aspects of impact to land usage, water balance, air and noise pollution, flora and fauna and nearby communities. This increase has been brought about by changes in the industry:
- Mining operations are steadily moving into increasingly remote locations.
- Technology improvements (e.g., more sophisticated data acquisition and increased ubiquity of wireless communications) improve the amount, accuracy, speed of information available from a mine site.
Changes like these are prompting regulatory agencies to increase information and reporting requirements.
Social compliance is also an important environmental factor. Local stakeholders constitute a powerful force that can support or destroy the success of a mining venture.
Mining companies that are also mine operators, compared to companies that find, prove, and then sell properties, want to purchase properties that have proven deposits and that are economically feasible from a business standpoint. They want to get into production as fast as possible in order to minimize financing costs. Any factors that could slow down the process to production will adversely impact the economic viability of the operation. Therefore, even though a property might have a proven and viable deposit, the presence of socio-political obstacles or risks can bring a planned operation to a halt. In other words, the property must appear to have social compliance.
With respect to social license, the “find and sell” and “find and operate” companies have different strategies. The former strategy does not call for social license investments, while the “find and operate” strategy of operating mining companies must include social license issues in their property analysis, and must justify pursuing properties that have ignored these issues. Supply and demand has an impact on this justification: When mineral prices are high and properties are scarce, buyers are more willing to accept the cost of dealing with stakeholder relations challenges. When mineral prices are low and/or properties are plentiful, buyers/operators can be more selective.
Solving the Puzzle
Environmental and social compliance call for incorporation of sustainability practices as core business strategy (as opposed to a siloed business approach, which was the norm for decades). Sustainability must be a key focus throughout a site’s life cycle, from analysis of feasibility of deposits to mine reclamation.
In today’s marketplace, sustainable businesses (i.e., those have no negative impacts on the environment, community, or economy in the areas in which they operate) gain additional shareholder and competitive value because of their practices. Strategic investments in sustainability can be strong drivers of growth and profitability if executed effectively. Though “compliance” might be the initial objective for implementation of sustainability practices, results extend beyond regulatory requirements. Technology can help identify issues beyond the regulatory framework; for example, monitoring of social networking sites can pinpoint issues or activities that could adversely impact a project so that proactive measures can be put into place to prevent crises.
Business sustainability as an HSSE puzzle solution combines people, processes, and technology to meet strategic objectives and mitigate risks. Proceeding in a stepwise manner, specific drivers are identified for a given operation or site. Objectives and targets that address environmental and social issues are created and the actions for their achievement are identified. These actions are incorporated into projects which are implemented and monitored. Automation plays an important role in these projects, both in terms of data capture and results monitoring.
Wipro’s Business Sustainability Framework is a step-bystep methodology that helps mining enterprises create and execute a successful sustainability strategy. Along with a global ecosystem of provider partners, we help clients manage auditable environmental and energy inventories and make cost-effective operational improvements that improve social license. The framework follows regulatory requirements and voluntary guidelines embodied in instruments including but not limited to the Kyoto Protocol, EU ETS, UK CRC, and US Clean Air Act.
As global resources diminish, organizations need to innovate to sustain themselves. Many HSSE puzzles in the mining industry arise from resource constraints, and effective use of technology can be the basis for successful solution. All five of the puzzles discussed here are examples where proven technologies can free up critical resources, improve performance, and minimize risk.
Technology alone, however, does not provide the full solution. Technology projects must be designed and implemented effectively. In addition, a technology solution may need to be customized on a site-by-site basis in order to take a variety of factors such as mining type and governmental regulations into account.
Human behavior must also be considered when putting HSSE puzzle solutions into place. It is important to manage change effectively to ensure that new processes and workflows are fully adopted by mining personnel. Finally, in cases where a solution requires the integration of multiple technologies from a number of vendors, the design, implementation, and change management can present puzzles of their own.
With these considerations in mind, a mining enterprise should engage a technology partner with the right expertise to support the right puzzle solutions from design to full deployment. Such a partner will be well-versed in the right applications and tools (and the vendors that offer them) as well as in project and change management. This will ensure that the HSSE solution fits the puzzle and produces the desired results.
Among the industries that Wipro serves, the oil & gas sector is most closely parallel to the mining sector. Though mining companies pursue a much wider range of operation types and extract a wider variety of resources, they generally follow the same workflow processes as petroleum companies. Because of these similarities, Wipro’s deep experience in the oil & gas industry offers a significant business benefit to mining enterprises. We have tailored solutions that have proven successful in the oil and gas space to the specific needs and challenges of the mining sector. This gives mining companies access to reliable solutions that can ramp up quickly in their operations and that address key challenges in today’s market.