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MAC gives advisory board more power over sustainability standard

Mining Association of Canada gives panel a vote over Towards Sustainable Mining program

Ben Chalmers, senior vice-president of Mining Association of Canada. (Courtesy Mining Association of Canada)

The Ottawa-based Mining Association of Canada (MAC) has given its advisory body a firmer hand in writing its sustainability standard, as pressure mounts on mine producers to be socially and environmentally responsible.

MAC, which has approximately 50 members including Teck Resources, Rio Tinto and Glencore, passed a motion in mid-June to give its Community of Interest Panel (COI) a vote on the Towards Sustainable Mining (TSM) program.

It gives COI, an assembly of stakeholders and corporate voices that could only previously give advice, greater decision-making over environmental and social practices, according to Ben Chalmers, senior vice-president of MAC.

“It’s time,” he said about the governance shakeup. “We’ve been doing this for 20 years. The relationship between the board and the panel is one of trust and confidence that those involved are operating with an interest in improving the practices of the industry in good faith.”

Customers and investors demanded this change in order to continue using TSM, as standards in other sectors are becoming more of a shared decision between civil society and industry, he added.

The importance of Towards Sustainable Mining

Established in 2004, TSM is a standards and reporting framework for mines that covers communities and people, and environment and energy efficiency, across nine protocols. The protocols include Indigenous and community relationships, tailings management, water stewardship, biodiversity and climate.

“It was a realization that if we are to be successful as an industry, (we) need to do better in terms of social and environmental aspects,” Chalmers said about the creation of TSM.

Facilities are graded on the protocols from the lowest grade of C to the highest performance of AAA, or a pass and fail for crisis planning and communication, and child labour. The results are publicly reported in annual releases, then verified by an external organization (such as an audit firm) every three years to assess the accuracy of the self-assessment.

TSM participation is necessary to be a part of MAC. If a company does not demonstrate improvement, a corrective process takes place.

A consensus on good practice is made by TSM and the scores incentivize better performance, Chalmers said, which is a way for the industry to hold itself accountable. Mines have improved since TSM’s adoption, he added.

In 2006, only about half of the mines met a grade of A or better in areas such as Indigenous engagement and tailings. Today, over 90 per cent meet the mark.

MAC’s goal is to see its members have an A or higher grade for every protocol under TSM.

Though some companies have left MAC because of TSM, participating in the sustainability standard comes with benefits, Chalmers continued. MAC gives mining companies a voice in shaping federal policy and joining a “community of practice” which enables learning from peers.

TSM, Chalmers said, has been a membership draw more than a siphon. He has seen more companies join MAC since TSM was implemented, and a majority cite the standard as a key factor. With companies facing more pressure from customers and investors for responsibly sourced minerals, adhering to TSM is a signal of action.

An important voice in TSM is the COI panel. The advisory board is made up of 12 to 15 people from Indigenous organizations, communities where MAC members are active, environmental and social groups, and financial organizations. It now has an equal vote with MAC’s board of directors, elevating its opinions beyond guidance.

TSM’s elevated voice

Previously, MAC’s board of directors proposed changes to TSM, and COI reviewed the alterations and provided suggestions. Though he said MAC has never defied COI’s advice, Chalmers said with the standards being used for market access, “it has become more and more important to make sure that the standards are in fact equally governed on a multi-stakeholder basis.”

The COI panel now has an equal vote with MAC’s board. Revisions to TSM require consent from both parties. The panel was also granted control over its membership.

Members of the COI panel include:

  • Carolyn Chisholm, director of external affairs for Rio Tinto Canada;
  • Jocelyn Fraser, a post-doctoral fellow at the University of British Columbia’s Liu Institute for Global Affairs;
  • Theresa Baikie, who implemented the Impact and Benefit Agreement between the Nunatsiavut government and Vale; and
  • Carol Plummer, executive vice-president of sustainability, people and culture for Agnico Eagle Mines Ltd.

Chalmers said it is crucial to have industry members involved in COI to create dialogue between the senior leadership of businesses and civil society. They also do not participate in decision-making (Chisholm and Plummer, for example), he said, in response to a question about possible conflict of interest from having industry figures on an advisory board.

A major development for TSM is a public reporting standard for equity, diversity and inclusion, which will come out in 2025.

The change will likely strengthen the independence of TSM and COI, but Chalmers is not sure if TSM will end up going in another direction. “All of us that are involved are eager to see how this plays out,” he said.

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