The opportunities in aligning environmental and social management systems - a South African mining case study

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The opportunities in aligning

Environmental and Social

Management Systems - a South

African mining case study

BLL Semenya

orcid.org 0000-0003-3302-1441

Mini-dissertation accepted in partial fulfilment of the

requirements for the degree

Master in Environmental

Management

at the North-West University

Supervisor:

Prof FP Retief

Co-supervisor:

Prof JM Pope

Graduation July 2020

24051160

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PREFACE

DECLARATION

I, Boipuso Semenya, hereby declare that the study titled “The opportunities in aligning

Environmental and Social Management Systems - a South African mining case

study

” and submitted to the North West University, Potchefstroom Campus, was

prepared solely by me under the guidance of Prof. F. Retief for the master’s degree

qualification Master of Environmental Management.

I, Boipuso Semenya, declare that the results reported in this paper have not been

submitted to any other university or institute for qualification.

Boipuso Semenya

15 March 2020

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ACKNOWLEDGEMENTS

Most importantly, I thank the Lord Almighty, for giving me the strength, wisdom, courage and resilience to do this study. All the glory and praise be to Him always!

My gratitude goes to the following people: My family for their continuous love and support.

My supervisors and all staff in the Faculty of Natural Sciences at the North West University, Potchefstroom Campus. Your kindness and consistent willingness to help is commendable. My colleagues and mentors at Anglo American Platinum for their guidance and participation in the study. The management of Anglo American Platinum for allowing me conduct the study in the company and for provision of various resources.

My friends for their encouragement and understanding when I had to go study instead of hanging out.

Last, but definitely not least, my daughter Kaboentle, who was born during the execution of the study. It was tough being a new mom and a part time student at the same time but we made it. May this be an inspiration to you one day to reach for even greater heights – not even the sky is the limit.

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ABSTRACT

Historic environmental pollution and degradation from mining and mining related activities has had an adverse impact on the success of mining organisations. This is mainly as a result of pressure from stakeholders (authorities and communities) to hold mining corporations to account for the impacts of their activities, services and products on the environment. Such impacts have also affected the safety, health and wellbeing of communities. In order to curb this, mining (and other industries) across the world have adopted various standards, systems and strategies to demonstrate sound business practises that include environmental stewardship. These include the voluntary adoption of systems that are based on internationally recognised standards, i.e. ISO14001. The latest version of this standard explicitly requires organisations to incorporate the needs and expectations of interested parties and to address risks and opportunities in order to derive value to the environment, stakeholders and the business.

To date, mining corporations across the globe experience difficulties in adopting sustainable practices that demonstrate responsible environmental management. One organisation has developed an objective of ‘Zero Waste to Landfill by 2020’ using processes and procedures of its ISO14001-based environmental management systems (EMS). However, the benefit is not only for maintaining certification, but host communities also benefit from the recycling of non-mineral waste. This objective demonstrates responsible environmental (waste) management and simultaneously assists the organisation to meet some of its social objectives. Therefore, the benefit of the EMS in the organisation may potentially be underestimated.

This could mean that other benefits, that could be delivered by the system, that may benefit stakeholders and the business, are possibly not realised. This may be attributed to systems that are not aligned and/or business units/functions operating in isolation. This research aims to understand the opportunities that exist in aligning environmental and social management systems, using a South African mine as a case study. The views, opinions and perceptions of a selected audience are investigated and presented in this study focusing on five key environmental aspects. Whilst the environmental department respondents are mostly concerned with compliance to applicable legislation, the social performance department respondents are more concerned with stakeholder relations. However, what emanates from the data collected is that participants are of the view that there are opportunities that exist in other aspects and that true value is in can be realised through collaboration across disciplines.

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LIST OF TABLES

Table 4-1: The top 2 most common explanations provided by the respondents regarding consideration of previous year’s performance when setting

objectives and targets. ... 36 Table 4-2: The top 3 most common explanations provided by the respondents

regarding consideration of other departmental objectives and targets. ... 39 Table 4-3: Total number of participants’ response to the question ... 46

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LIST OF FIGURES

Figure 1-1: Sequence of the dissertation. ... 5

Figure 2-1: Questionnaire Design ... 10

Figure 3-1: The Plan-Do-Check-Act cycle of ISO14001: 2004-based EMS (Martin, 1998:8). ... 13

Figure 3-2: The relationship between the Plan-Do-Act-Check (PDCA) Cycle and the framework for ISO14001 (ISO, 2015). ... 14

Figure 3-3: The main highlights in the evolutions of ISO that lead to the development of ISO14001 (source: ISO.org https://www.iso.org/the-iso-story.html#2). ... 16

Figure 3-4: The Actual and Potential savings of ISO14001 (Davies, 2005). ... 18

Figure 3-5: Anglo American Platinum Operations in South Africa (AAP Annual Report, 2017). ... 21

Figure 3-6: Map of Anglo American’s SHE Management System (Way, 2017:6). ... 22

Figure 3-7: The Anglo American Social Performance Management System (AASW, 2017)... 24

Figure 4-1: Total number of respondents per role/department ... 28

Figure 4-2: Participants level of employment in the role ... 29

Figure 4-3: Number of years of experience in this field at Anglo American Platinum ... 30

Figure 4-4: Comparison of respondents with experience in this role at other companies other than Anglo American Platinum. ... 31

Figure 4-5: Comparison of respondents with experience in this role at other companies other than Anglo American Platinum ... 32

Figure 4-6: Environmental respondents’ involvement in the setting or execution of departments’ objectives and targets ... 33

Figure 4-7: Respondents influence in the setting and/or implementation of objectives and targets ... 34

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Figure 4-8: Respondents consideration of previous year’s performance when setting objectives and targets. ... 35 Figure 4-9: Environmental respondents’ consideration of other departmental

objectives and targets when setting their own objectives and targets. ... 37 Figure 4-10: SP respondents’ consideration of other departmental objectives and

targets when setting their own objectives and targets. ... 38 Figure 4-11: An indication of the type of benefit that potentially exists in aligning

Environmental and Social Objectives per department. ... 41 Figure 4-12: Total number of Environmental respondents who think that there are

opportunities that exist in aligning E&S objectives ... 42 Figure 4-13: Total number of Environmental respondents who believe that further

investigation and implementation would be of value ... 44 Figure 4-14: Indication per department of where the benefit could be realised. ... 45

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List of Abbreviations and Acronyms

AA Anglo American

AAP Anglo American Platinum

AMPLATS Anglo American Platinum

B-EMS British Environmental Management Standard

BU Business Unit

CSI Corporate Social Investments

CSR Corporate Social Responsibility

DEAT Department of Environment and Tourism

EA Environmental Assessment

EPA Environmental Protection Agency

EM Environmental Management

EMAS European Union Eco-Management Audit EMS Environmental Management System GRI Global Reporting Initiative

GTS Group Technical Standards

HR Human Resources

IEM Integrated Environmental Management IFC International Financial Corporation

IMS Integrated Management Systems

ISO International Organisation for Standardisation

Ltd Limited

NEPA National Environmental Protection Agency O&T Objectives and Targets

PDCA Plan-Do-Check-Act

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PMR Precious Metals Refiners

PPP Plans, Policies and Programmes

RACI Responsible, Accountable, Consulted, Informed RBMR Rustenburg Base Metals Refiners

RSA Republic of South Africa

SA Sustainability Assessment

SCR Social Commitment Register

S&EIA Social and Environmental Impact Assessment SEA Strategic Environmental Assessment

SEAT Socio-Economic Assessment Tool

SEP Stakeholder Engagement Plan

SES Social-Ecological Systems

SHE Safety, Health and Environment

SHEQ Safety, Health, Environment and Quality

SIA Social Impact Assessment

SMART Simple, Measurable, Achievable, Realistic Targets

SMP Social Management Plan

SMS Social Management Systems

SEP Stakeholder Engagement Plan

SP Social Performance

UNCED United Nations Conference on Environment and Development UN SDG United Nations Sustainable Development Goals

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CHAPTER 1: INTRODUCTION AND PROBLEM STATEMENT

1.1 Introduction and Background to the study

Industries (mining, housing, energy, water, infrastructure, etc.) across the world continue to experience difficulties in adopting and maintaining sustainable practises (Amores-Salvadó et al., 2015; Babi et al., 2016; Tsai et al., 2016). For the mining industry in particular, it is a well-known fact that mining and mining-related activities are the cause of most the significant negative and often irreversible damage to the natural environment compared to other industries (Moffat & Zhang, 2014; Mutti et al., 2012; Mzembe & Downs, 2014). The manifestation of these negative environmental impacts is seen in industrial accidents, environmental degradation, health and safety issues, impact on livelihood of local communities and violation of human rights (Mutti et al., 2012). Although these are environmental impacts, they are closely linked with social impacts – have some form of effect on people’s health, safety and wellbeing.

Several authors such as Babi et al. (2016) and Mutti et al. (2012) explain that mining corporations across the world continue to experience difficulties in adopting and maintaining sustainable practices as the industry naturally exploits and depletes non-renewable resources. Thus, in response to this pressure, mining corporations have developed and implemented various strategies and practices around social/community development, sustainable development and environmental management to address these challenges using proactive methodologies (Mutti et al., 2012) and complex environmental policies and strategies (Betts et al., 2015). Most of these are voluntary and they go beyond the traditional ‘command-and-control’ instruments which are often promulgated by regulators through policy and law (Boiral & Henri, 2012; Heras-Saizarbitoria et al., 2013; Nel & Wessels, 2010). One such instrument is an Environmental Management System based on internationally recognised standards.

Environmental Management Systems (EMS) assist organisations to be more proactive in managing (preventing) the negative impacts of their activities, services and products rather than being reactive when the damage is already done (Boiral & Henri, 2012; Mutti et al., 2012; Oliveira et al., 2016). The most commonly adopted standard for environmental management is the ISO 14001 international standard which many companies worldwide have adopted voluntarily (Betts et al., 2015; Boiral & Henri, 2012; Corbett, 2001; Ferron-Vilchez, 2016; Ferrón Vílchez, 2017; Nel & Wessels, 2010; Oliveira et al., 2016; Rondinelli, 2000a; Rondinelli, 2000b). ISO14001 is rooted on the concept of sustainable development (ISO, 2015) and the latest revision of this standard strongly incorporates the consideration of interested parties, their needs and expectations and

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which of these become compliance obligations. This is in attempt to add value to the environment, organisation itself and interested parties (ISO, 2015).

1.2 Problem Statement

According to González-Benito et al. (2011), there are over 220 000 organisations worldwide that have adopted (implemented and certified) Environmental Management Systems (EMS) as a tool to demonstrate commitment to responsible environmental management and for overall business performance (Arimura et al., 2016; Lannelongue & González-Benito, 2012; Nawrocka & Parker, 2009; Zobel, 2013). This number is reported to have increased to over 300 000 organisations across 171 countries worldwide (ISO, 2015). Many organisations certify their EMS for similar reasons which are described in the literature review section of this study.

However, Hilson (2002) state that an EMS does not have to be certified to be effective as there are several organisations that only use it as a guideline at the operational level. In 2015, Anglo American Platinum, took the decision to put on hold their external EMS certification, except at the operations where the final product is dispatched (i.e. Rustenburg Base Metals Refinery and Precious Metals Refinery) – in order to comply with customer requirements (AMPLATS Sustainability Report, 2017: 61). Although, the EMS is still being maintained internally at the other operations, it seems that its value as a tool to deliver other benefits to the organisation and stakeholders is potentially underestimated.

Prior publication of the ISO14001:2015, González-Benito et al. (2011) published that EMS tend to only respond to internal pressures and ignore pressures from external primary and secondary stakeholders (e.g. social pressures), once certification is achieved. This could be a possible indication of the exclusion of social aspects in the organisations’ EMS. The 2015 publication of ISO14001 seeks to address this problem. For many organisations, social aspects and objectives are usually managed through Social Management Systems (SMS) and Corporate Social Investment (CSI) policies and initiatives. These generally aim to uplift communities in such a way that their quality of life is improved and safeguarded. However, most CSI programmes focus mainly on community welfare, healthcare, and entrepreneurship and are lacking in environmental management (Mezinska & Strode, 2015). This study does not examine CSI policies, but rather social management systems. The concepts related to SMS are unpacked in chapter 3.

Often, organisations do not link opportunities that exist in the environmental management discipline to CSI policies and objectives. This may be attributed to the traditional way of doing business wherein environmental management is grouped together with safety, health and quality to form the SHEQ department. Thus, policies, standards and practices in SHEQ and Social

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Performance tend to be managed in isolation. Mezinska and Strode (2015) concur and emphasize that businesses do not operate in a vacuum (ISO.org) yet management systems (social, financial, engineering, supply chain, SHEQ, etc.) are often isolated. Thus, the potential to deliver optimal value to the organisation is possibly lost (overlooked/not realised). This study aims to unlock this potential by investigating the possibility of aligning Environmental Management Systems/Objectives as a tool to achieve social objectives and ultimately derive optimal value for the organisation, the environment and stakeholders (communities/interested parties).

One of the aims of ISO 14001: 2015 standard is to help organisations achieve the intended outcomes of its EMS by providing value for the environment, the organisation itself and interested parties (ISO, 2015). This standard has incorporated a clause for “understanding the needs and expectations of interested parties” (clause 4.2) and “addressing risks and opportunities” (clause 6.1). Herein, lies the opportunity to align environmental and social objectives which can provide overall value for the environment, the organisation and interested parties.

An example of such an opportunity which is currently adopted by Anglo American Platinum is the “Zero Waste to Landfill by 2020” strategy. The strategy was introduced in 2013 – set against a 2012 baseline. The initiative is a sustainable community-beneficiation project whereby local communities (particularly targeting the youth and women) benefit through the recycling of non-mineral waste. The project does not only demonstrate responsible environmental (waste) management but also assists the organisation to meet some of its social objectives. According to Virapongse et al. (2016:84) “urgent environmental issues are testing the limits of current management approaches and pushing demand for innovative approaches that integrate across traditional disciplinary boundaries.” It is, without a doubt, that waste is one of the urgent, international environmental issues that requires innovative approaches. The Zero Waste to Landfill (ZW2L) strategy is indeed testing the limits of current and future management approaches – it utilises innovative approaches to solving the waste challenge. The purpose of this study is to investigate further opportunities in aligning environmental and social objectives that will benefit the overall business strategy to a greater extent. The study was probed by AAPs strategy for waste management and how it indirectly benefits host communities and assists the organisation meet some of its social objectives.

1.3 Research Aims and Objectives

The purpose of this study is to investigate the opportunities that exist in aligning environmental management objectives with social management objectives with the intent of adding value to the organisation, the environment and interested parties in accordance with requirements of

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ISO14001: 2015. This study uses Anglo American Platinum’s Zero Waste to Landfill by 2020 objective as a case study.

The objectives of the study are to investigate/determine:

 the nature of environmental and social management systems for mining organisations;  whether such practices can be optimized (and how) and aligned to the organizations social

objectives in order to add or enhance value for overall business performance. This purpose of this study is to attempt to answer the following research question, i.e.

 How can the opportunities from the organizations EMS be optimized and aligned to the organizations social objectives?

1.4 Structure of the Research

This study has five (5) chapters which are set out as described below.

Chapter 1: Introduction and Problem Statement. This chapter introduces the research topic and provides a background and rationale for the study. In this chapter, the problem statement is provided with the aims and objectives of the study. This chapter also includes an outline of the sequence of the dissertation. In essence, chapter 1 is a discussion that ‘sets the stage’ for subsequent chapters.

Chapter 2: Research Design and Methodology. This section begins with an introduction consisting of some simple definitions found in existing literature on what is research; why do we conduct research; the various types of research; distinguishes between research methodology and research design. The chapter further describes the research design and methods used to carry out this research in attempt to answer the research question as well as rationale for selecting each method.

Chapter 3: Literature Review. This consists of a review of literature on environmental management systems, ISO 14001 and social management systems. This section contains the evolution of EMS and SMS, including some international perspectives and the South African context.

Chapter 4: Analysis and Interpretation. This chapter contains the results of the data analysis from the data collected to carry out the study. The intent of this section is to discuss the results obtained

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and attempt to gain an understanding of the opportunities that exist in aligning environmental and social objectives.

Chapter 5: Conclusion and Recommendations. This chapter concludes and summarises the findings based on the research aims and objects. In this section, recommendations are also proposed for future studies. The above is presented diagrammatically in figure 1.

Figure 1-1: Sequence of the dissertation. • Introduction

• Problem Statement • Aims and Objectives • Structure of the Research Chapter 1

Introduction and Problem Statement • Research Methodology • Research Design • Research Methods • Conclusion Chapter 2 Methodology • EMS • SMS • Conclusion Chapter 3 EMS and SMS

•Optimizing the potential of EMS through VEPs • Opportunities for alignment: EMS and SMS

(questionnaire results)

• Recommendations from interviewees • Conclusion

Chapter 4

Optimizing potential of EMS for Social objectives

•Conclusion

•Recommendations for future research Chapter 5 Conclusion L i t e r a t u r e R e v i e w

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CHAPTER 2 METHODOLOGY

2.1 Introduction

Leedey and Ormrod (2016: 2) define research as “a systematic process of collecting, analysing, and interpreting information.” The focus is “to discover the meaning of the data and its relevance to the research problem” (Leedey and Ormrod, 2016: 243). Hyland (2016) states that “research begins with isolating something that interests or worries us then asking questions about it”. In this case, the point of interest is in the possible alignment of environmental and social objectives, using a South African mining organisation as a case study. The types of questions asked in research, how we collect, analyse and interpret the data to answer them, depend on our preferences and preconceptions, the topic and the purpose we have for studying it, the context, our access to data, the time and resources we have and the energy we are prepared to invest (Hyland, 2016).

It is essential to distinguish between research methods and research methodologies. Hyland (2016:117) defines research methods as “ways of collecting data such as observations, surveys and interviews” whilst research methodologies are “the principles and understandings that guide and influence our choice and use of methods such as experimentation and ethnography.” In essence, methodology concerns how research is done, how we find out about things and how knowledge is gained. It clarifies, explains and justifies the choice of certain methods employed in our research.

This chapter describes the methodology and methods used to collect and analyse the data required to answer the research question. The research design and data collection methods are described in the next section.

2.2 Research Methodology and Methods

Hyland (2016:117) states “there is no “one-size-fits-all” formula for carrying out research on writing (or on anything else) but nor is there a perfect approach to each question.” Therefore, an increasing number of researchers are of the view that mixed-methods research is always better than qualitative or quantitative methods (Leppink, 2017; Goodell et al. 2016). Grant and Booth (2009:94) concur and state that “mixed methods can refer to any combination of methods where at least one of the components is a literature review.” A mixed-methods approach to research consists of gathering both textual data from texts and numerical data at the same time (Creswell,

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various sources (literature review) and numerical data (survey questionnaire). The use of multiple (mixed) methods is beneficial in that it helps to increase reliability and validity of the data. Leppink (2017:98) emphasizes the fact that “science, without replication, has little credibility.”

2.2.1 Research Design

This research used a South African mining house, Anglo American Platinum, as a case study. The research purposively targeted employees in the Environmental Management and Social Performance (SP) Departments at both Corporate (Head Office) and Operational Levels due to their knowledge and experience in the subject(s). This is recommended and defined by (Rosenthal, 2016) who states that “…wherein individuals are recruited specifically because they have the experience under investigation.” It is important to note that environmental management at AAP is a subdivision of the Safety, Healthy, Environmental and Quality (SHEQ) department. However, only employees that are responsible for environmental management were selected to participate in the survey. Equally important to note is that the SP department is centralised, thereby providing a service to more than one operation.

Senior management (at corporate level) were primarily targeted for the survey as they are responsible for developing the strategy at the Business Unit (BU) level and the setting of objectives and targets (both medium- and long-term). Employees in junior management/supervisory and lower levels, who are mainly based at the operations, were purposively selected because they are responsible for the execution/implementation of this strategy. AAPs operations include underground and open-cast mines, concentrators, smelters, a convertor plant and two refineries, i.e. base metals and precious metals refineries. All employees were surveyed using a questionnaire. A large number of participants were targeted to participate in the survey. They are situated across a large geographic location thus, they were sent the questionnaires via email as this is quick, reliable and of low cost (Hyland, 2016; Rosenthal, 2016). Refer to Annexure A for the covering letter and Annexure B for the questionnaire. Annexure C is the email communication that was sent to all the participants and the link to the survey. The next description describes the methods used to collect the data for this study.

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2.2.2 Data Collection Methods

The methods used to collect data for this research were literature review and a survey questionnaire. These are discussed in more detail below. For each method, rationale for selection to answer the research question is provided.

2.2.2.1 Literature Review

Grant and Booth (2009:94) describe literature review as “published materials that provide examination of recent or current literature.” They further add that the common characteristic of a literature review is that “…it reviews literature that has been published, implying that the included materials possess some degree of permanence and possibly, have been subject to a peer-review process” (Grant & Booth, 2009:97).

The major part of this research consisted of gathering textual data from various reputable sources and synthesising and presenting it in the form of a literature review. Such sources included books, AAPs Annual Sustainability reports, journal and internet articles on subjects related to environmental management systems; social management systems; ISO; ISO14001; ISO26000; mining and mining related activities, incidents, disasters and sustainable practices in the mining environment. McNiff (2013:108) states that reports are helpful in seeing how issues and opinions have changed over time. So the focus here was to observe how environmental and social management systems have changed over time at AAP and to explore opportunities or synergies for aligning environmental and social management systems (or objectives). The intent of the literature review was to provide the reader with some background to the subject and conceptualise the topic in the context of existing literature.

2.2.2.2 Questionnaires

The objective of the questionnaire was to understand the views/opinions of the audience (McNiff, 2013). Hyland (2016:117) explains that “questionnaires are useful for collecting large amounts of structured, easily analysable information about text users’ characteristics, beliefs or attitudes, information that is not usually available from observation of their behaviour or from their texts.” Leedey and Ormrod (2016:143) support this and further indicate that “questionnaires are helpful in addressing complex variables such as people’s opinions or attitudes about a particular topic.” Questionnaires are helpful when one aims to see the extent to which values are being lived out in practice (Goodell et al., 2016). This was one of the underlying purposes of this research. Questionnaires are similar to interviews in that they allow researchers to tap people’s views and experiences. However, Hyland (2016:117) warns that “they are more qualitative and restrictive.”

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A large component of the data in this research was obtained from questionnaires. The questionnaire was anonymous and did not allow participants to state their names, job titles or operation they are working at. The questionnaire was created on Google Forms and distributed to the participants in the Environmental Management and Social Performance departments via email. The email contained the background, rationale of the study and a link to access the survey electronically. The respondents were given a period of 3 weeks to complete the survey. A reminder was sent to all participants one week before the deadline, after which responses could no longer be submitted. The participants were offered an option to not participate in the survey without any negative consequences. A total of 41 employees in both the Environmental Management and Social Performance departments were selected to participate in the survey and 19 responded to the request. The survey was done on a completely anonymous basis and was only sent to employees in the Environmental Management and Social Performance Departments. Some employees replied via email confirming that they had completed the survey. Follow ups were done telephonically with participants who had not confirmed that they had completed the survey. This proved to be particularly helpful as participants could request for more explanations/clarity where needed.

As this research uses Waste Management as a case study, the questionnaire mainly consisted of opinion or value questions wherein interviewees were prompted to state other currently existing opportunities that may be overlooked or underestimated. They were also prompted to suggest new ideas in which environmental and social objectives may be aligned for the overall benefit of the environment, organisation and stakeholders. The interviewees were purposefully channelled/directed towards the 5 common environmental aspects of a mining organisation, i.e. water management, climate change and energy management, biodiversity management, air quality management and environmental incidents. These aspects are derived from RBMRs aspects and impacts register (Annexure D) and were risk assessed using the AAP 5x5 risk matrix (Annexure E).

2.2.2.2.1 Questionnaire Design

The questionnaire consisted of four parts as described in figure 2 below. The first part of the questionnaire consisted of the participants’ demographic data. This part focused on gaining an understanding of the participants’ roles, knowledge and level of experience. This section utilised closed choice questions. Part 2 of the survey consisted of both closed and open choice questions. The intent was to obtain the participants views and opinions on the management of their respective departments’ objectives and targets. Part 3 of the questionnaire consisted of open-ended questions which were aimed at probing participants to suggest other means by which

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environmental and social objectives can be aligned for the benefit of the organisation, stakeholders and the environment. Most of the questions in this questions required motivation (explanation or example for the choice selected). Lastly, part 4 of the survey simply asked the participants to add any other information they may have on the subject. The questions were developed from the variety of literature reviewed, particularly the systems AAP have in place for both Environmental and Social Performance Management.

Figure 2-1: Questionnaire Design PART 1: DEMOGRAPHIC DATA 1.1 What is your role in the organization? 1.2 What level of employment are you? 1.3 How long have you been in this role at Anglo

American Platinum? 1.4 Do you have

further experience in this role at other

company(ies) other than Anglo American Platinum? PART 2: MANAGEMENT OF OBJECTIVES AND TARGETS 2.1 What is your involvement in the setting or

execution of departmental objectives and targets? 2.2 How would you rate your influence in the setting and/or

implementation of Objectives and targets. Please select 1-5 with 1 being highly influential and 5 being no influence at all. 2.3 When setting objectives and

targets, do you consider performance results of the previous year to ensure continual

improvement? 2.4 When setting objectives and

targets, do you consider other departmental Objectives such as

safety, health, supply chain, finance, etc.?

2.5 When setting Objectives and targets, do you consider your departments objectives in line with providing some kind of benefit to the organization and

stakeholders? If yes, please explain or give example of this type of benefit.

PART 3: ALIGNMENT OF OBJECTIVES AND

TARGETS

3.1 Do you think there are other opportunities that

exist in aligning E&S objectives that could potentially benefit people,

the environment and the business?

3.2 In which of the following environmental aspects/indicators do you think these opportunities exist?

(i) Water Management (ii) Climate Change and Energy

(iii) Biodiversity Management (iv) Air Quality Management

(v) Significant incidents (vi) Other 3.3 In your view/opinion, do you believe that further investigation and

possible implementation of such projects would yield some benefit to

the:

3.4 Please indicate where this type of benefit could be realized:

(i) Financial (save costs) (ii) Improved compliance (iii) Improved stakeholder relations

(iv) Creating jobs (v) Other

PART 4: ADDITIONAL INFORMATION

4.1 Do you have any other comments that you would like to add

regarding the questionnaire?

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2.2.3 Data Analysis

Based on the questions developed for the study, the data was collated using identified criteria, i.e. participants demographic data; their understanding of the management of objectives and targets and extent to which they are involved when departmental objectives are set; current and possible opportunities of aligning environmental and social objectives; examples of projects that can be implemented in support of the alignment. As prescribed by McNiff (2013) the data was analysed using Microsoft Excel. The answers were grouped according by number of respondents per department and level of employment. The answers to questions that required explanations/examples were grouped into themes based on similarity. The full answers are on Annexures. The application proved to be helpful in organising and analysing non-numerical or unstructured data in an effective and efficient manner (McNiff, 2013; Rosenthal, 2016). Results of the data analysis are presented in Chapter 4 of this study.

2.2.4 Limitations to the Study

The following limitations are identified as possible constraints that impacted this research:  The study was probed by a relatively new concept for a mining organisation. It emanates

from the organisations ISO14001-based EMS but may be considered as an environmental breakthrough initiative. The study was conducted prior the targeted date for implementation (2020), thus it may be viewed as premature because the intendend outcomes of the strategy have not yet materialised fully.

 The use of an electronic survey is a limitation in that it achieved an average response from the targeted population. Sometimes, surveys are regarded as being time-consuming for people working in any industry. Thus, not all targeted respondents participated in the survey. Some participants did not respond at all in the survey. In addition, surveys can sometimes be vague to the recepient thereby leading the respondent to provide incomplete answers or even quit participating in the survey.

 Timing is considered another constraint. This simply means it is crucial to request participation during a time where particpants are expected to be at their ‘peak’ at work. The survey was sent out in December where it is common for many employees to already be on “holiday” mode.

 The purposeful selection of a target audience, i.e. only employees in the Environmental Management and Social Performance departments resulted in limited responses, views and perceptions - unlike if the survey was extedned to a broader audience, e.g. other department employees, members of host communities and other stakeholders.

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 Limitations can be found in any kind of study (Grant & Booth, 2009; Hyland, 2016) and all researchers are concerned with the trustworthiness (validiy and reliability) of data. In order to minimise threats to the reliability and validity of research, Hyland (2016:121) recommends carefully monitoring the use of test measurements and “the use of mixed methods to increase the validity of the eventual findings”. This study follows this recommendation and uses a mixed methods approach in order to answer the research question. To ensure validity, data was collected using a survey. An ethical clearance was obtained prior commencing with the research. Permission was also obtained from AAP management representatives to use the organisation as a case study. In addition, the research study and results were continually subject to review by the research promoters as recommended by Grant (2009).

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CHAPTER 3 ENVIRONMENTAL AND SOCIAL MANAGEMENT

SYSTEMS – A CRITICAL REFLECTION

This chapter consists of a review of literature on environmental management systems based on ISO 14001. The first section begins with explaining what environmental management systems and ISO14001 are, followed by a brief history of how EMS has evolved over time. This is followed by a description of the values and challenges organisations face from adopting an ISO14001-based EMS. The second section details the processes used by Anglo American Platinum for environmental and social management, respectively.

3.1 Environmental Management Systems

3.1.1 What are Environmental Management Systems?

An Environmental Management System is defined in ISO14001 (2015:2) as “part of the management system used to manage environmental aspects, fulfil compliance obligations and address risks and opportunities”. Andrews et al. (1999:2) defined EMS as “a formal set of procedures and policies that define how an organization will manage its potential impacts on the natural environment and on the health and welfare of the people who depend on it."

The purpose of an EMS is “to provide organisations with a framework to protect the environment and respond to changing environmental conditions in balance with socio-economic needs” (ISO, 2015:vi). One of the main features of an EMS is that it is systematic. It follows the Plan-Do-Check-Act model (Perotto et al., 2008) as illustrated in figure 2.

Figure 3-1: The Plan-Do-Check-Act cycle of ISO14001: 2004-based EMS (Martin, 1998:8).

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EMS based on the most recent publication of ISO14001 (2015) take on a different approach to the typical PDCA presented in figure 2 by incorporating internal and external issues as well as needs and expectations of interested parties (see figure 3). The fundamental principle of the EMS is to achieve the intended outcomes related to the environment, i.e.

 Achievement of compliance obligations  Achievement of environmental objectives  Enhancement of environmental performance.

Figure 3-2: The relationship between the Plan-Do-Act-Check (PDCA) Cycle and the framework for ISO14001 (ISO, 2015).

3.1.2 Why ISO14001?

ISO 14001 is “an internally agreed standard that sets out the requirements for an environmental management system. It helps organisations improve their environmental performance through more efficient use of resources and reduction of waste, gaining a competitive advantage and the trust of stakeholders” (ISO 14001: 2015). According to DaFonseca (2015) ISO 14001 is based on identifying and managing environmental impacts. This is the centre of improved environmental practice. In essence, ISO14001 sets the terms for “how” a goal (intended outcomes) should be

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achieved, not “what” the goal should be (Boiral & Henri, 2012). There are other international standards such as the British Environmental Management Standard (BS7750) and the European Union Eco-management Audit (EMAS) for environmental management but the most commonly adopted standard worldwide is the ISO14001 standard (Annadale, 2007; Boiral & Henri, 2012; Corbett, 2001; Hilson, 2002; Mazzi et al., 2016; Morrow, 2002; Nel & Wessels, 2010; Zobel, 2013).

3.1.3 The Evolution of Environmental Management Systems

The origin of the ISO standards dates back to 1946 with the development of the ISO federation in London (Boiral & Henri, 2012; Corbett, 2001; Zilahy, 2017). This federation was established with the intention of developing a global benchmark and creating an effective pathway for international communication. However, environmental matters only made the agenda in 1971 when the standard for Water and Air Quality were developed (ISO.org). Contemplations of the ISO 14001 began in 1992 when the General Agreement on Trade and Tariffs were negotiated at the Earth Summit on Sustainable Development held in Rio, Brazil. Environmental Management Systems are a global adoption and their adoption is traced back to the 90s (Ferron-Vilchez, 2016; Gölgeci et al., 2019; Zilahy, 2017).

In 1987, ISO published the first standard for quality management (ISO9000) which then gave way to ISO 14001– the standard for environmental management (ISO.org; Matela, 2006). The ISO then established a Study Group to conduct research on and advise the working group tasked with the development of the ISO 14001 standard. The first ISO14001 standard was published in 1996, with the second and third revisions published in 2004 and 2015, respectively. Nel (2014) anticipates that the next revision of the standard will be published in 2025. The highlights of the evolution process are illustrated diagrammatically in figure 4.

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Figure 3-3: The main highlights in the evolutions of ISO that lead to the development of ISO14001(source: ISO.org https://www.iso.org/the-iso-story.html#2).

The advancement of EMS is embedded in the concept of Integrated Environmental Management (IEM) and subsequently Sustainable Development (SD) (DEAT, 2004). SD is defined as “achieving a balance between the environment, society and the economy to meet the needs of the present without compromising the ability of future generations to meet their needs” (ISO, 2015:vi; Zhang, 2000). In its overview of IEM, DEAT (2004) dates the origin of IEM back to the 1970s when EIA was for the first time validated as a tool for environmental management in the United States of America. In 1984, South Africa was for the first time introduced to the notion of IEM where it originated as an approach to linking development activities with their environmental impacts (Retief & Sandham, 2001). DEAT (2004) however argues that the current IEM system is challenged by focusing environmental, social and economic objectives in the application of IEM tools. Environmental Management Systems are therefore implemented with the hope that environmental sustainability can improve the performance of an organization (Barg, 2015). In 2005, the South African Department of Environment and Tourism (DEAT) reported that an estimated 66 000 companies in 113 countries are ISO 14001 certified. This number is reported to have increased to 140 countries in 2006 by Matuszak-Flejszman (2009). From 1996, when the

1946

Development of ISO Federation in London.

1951

ISO’s first standard was published (ISO/R 1:1951 Standard Reference temperature for industrial length measurements. 1971 Standards for Water Quality and Air Quality published. 1987 ISO 9000 published (Quality Management Systems) 1996; 2004; 2015 ISO14001 published – revisions 1, 2 and 3, respectively. (Environmental Management Systems)

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their organisations’ EMS certified (Boiral & Henri, 2012; González-Benito et al., 2011; Zobel & Burman, 2004). This number has increased to over 300 000 organisations in over 171 countries worldwide (ISO, 2015). EMS certification is done by an accredited company and is often costly and time-consuming for smaller organizations to implement and adopt. However, an EMS does not have to be certified in order to be effective as there are several organizations that use them as a guideline at the operational level (Boiral & Henri, 2012; Hilson, 2002).

3.1.4 The value of adopting Environmental Management Systems

Many companies across the globe have realized the value of an EMS and its contribution to overall business performance. In the United States of America (USA), Melnyk (2005) reports that an ISO certified company experiences lower penalties from the Environmental Protection Agency (EPA) in a situation where environmental legislation is contravened. In China, approximately 60% of hotels are guided by an EMS and are also ISO certified (He et al., 2015; Qi et al., 2011). This adoption is encouraged by government and other individuals (i.e. consumers and stakeholders)(Qi et al., 2011). Perhaps this is the vision for the future for the Republic of South Africa (RSA) – to officially regulate Environmental Management Systems. Annadale (2007:3) quote Sugiyama and Imura (1999) who state that “the adoption of voluntary environmental agreements adopted in Japan over the last 30 years have benefited both government and companies.”

As an example, Zobel (2013) investigated whether ISO14001 is a tool for those in need or a signal for “greenness” in Swedish manufacturing firms. In this study, it was found that firms generally choose to adopt and certify an EMS and that an EMS has been beneficial to such firms as there has been a significant improvement in the firms’ performance before and after implementation and certification.

Most of the research done in the field of EMS found that many companies have similar reasons as to why they have adopted (implemented and certified) an EMS. Such reasons include improving company image and reputation (Perotto et al., 2008; Zobel, 2013), benchmarking with competitors in the market (Nawrocka & Parker, 2009), customer demand/requirement (Morrow, 2002; Tatoglu et al., 2015), pressure from regulatory bodies (Boiral & Henri, 2012; He et al., 2015; Heras-Saizarbitoria et al., 2013; Morrow, 2002; Perotto et al., 2008; Zobel, 2013) and stakeholders (Babi et al., 2016; Castka & Prajogo, 2013; Mzembe & Downs, 2014; Perotto et al., 2008; Tatoglu et al., 2015) to reduce their environmental incidents and liabilities (Morrow, 2002), to increase operational efficiency and reduce waste (Corbett, 2001; Morrow, 2002; Zutshi & Sohal,

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2004b), access to markets and other financial instruments (Nel & Wessels, 2010; Oliveira et al., 2016; Tatoglu et al., 2015; Zutshi & Sohal, 2004a). (Annadale, 2007) also found that pollution control, and increasing resource input efficiencies were some of the other reasons provided by 40 managers across various sectors of industry in Western Australian Firms (Zutshi & Sohal, 2004a). Some of these benefits are presented in figure 5 below.

Figure 3-4: The Actual and Potential savings of ISO14001 (Davies, 2005).

3.1.5 The challenges of adopting an Environmental Management Systems

Organisations are faced with the problem of concurrently ensuring that they meet the requirements of the EMS and enhancing their environmental protection (WWISE, 2017). The transition from ISO 14001: 2014 to ISO 14001: 2015 compels organisations to scrutinize their context (Qualsys, 2015). This will be significant in safeguarding that the organisation considers internal and external pressures which can affect its goals. Furthermore, this will improve the likelihood of the organisation to achieve certification (Qualsys, 2015).

Lewandowska and Matuszak-Flejszman (2014:1797) reflect on the characters of the new ISO 14001: 2015 which aims to “tackle the challenge that organisations face in integrating ISO 14001 and ISO 19001.” The authors explain that the eco-design of products and a holistic approach to addressing a company’s environmental impacts will improve a company’s legal compliance and environmental appearance since it includes tools such as life cycle approach (LCA). These

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changes will enable management to commit and leadership to enlarge the spectrum of the organisations environmental objectives in its planning. Companies will further structure their own visions on voluntary SD and CSR. Anglo American Platinum’s “Zero Waste to Landfill by 2020” strategy realizes the mandate of ISO14001 and addresses one of its major environmental aspect and associated impacts. The strategy utilises the LCA of its products (in this case by-products in the form of waste) wherein waste is no longer viewed as waste but as a resource.

This may prove relatively easy for large organisations to achieve due to the nature and extent of the business. In the contrary, small-medium companies face challenges in implementing ISO 14001 due to poor capacity and availability of resources. This is mainly attributed to the absence of financial, human and technical resources (Mazzi et al., 2016; Rondinelli, 2000b).

3.2 Social Management Systems

3.2.1 What are Social Management Systems?

Social Management Systems (SMS) encourage and assist organisations to contribute to sustainable development and go beyond legal compliance. Social responsibility and sustainable development are two concepts that are often used interchangeably - with almost the same meaning (Mezinska & Strode, 2015). They are different concepts but closely linked because social responsibility is one of the cornerstones of sustainability (Hemphill, 1997; Mezinska & Strode, 2015). Mezinska and Strode (2015) define social responsibility as “a measure of how an organisation does business and applies the principles of accountability, transparency, ethics and respect for laws, stakeholders and the environment”. Various authors concur, stating that social responsibility contributes to solving or reducing social problems (Castka and Prajogo (2013); (Moffat & Zhang, 2014; Mutti et al., 2012; Mzembe & Downs, 2014; Rondinelli, 2000a).

The most internationally recognised standard for social responsibility is ISO26000. Although it is not a standard with set requirements, it is a guideline that organisations may use to demonstrate social responsibility and manage their social impacts. The development of ISO26000 is based on similar conceptions as environmental management systems, i.e.

 Sustainable development (balance of environment, society and economy to meet the needs of present generations without compromising the ability of future generations to meet their needs).

 Organisations and stakeholders becoming more aware of the need for, and benefits of socially responsible behaviour.

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 The welfare of society and the environment being major components of measuring overall business performance and ability to continue operating effectively. (ISO26000).

ISO 26000 - Guidance on social responsibility is launched from ISO. It is the “standard providing guidelines for social responsibility (SR).... its goal is to contribute to global sustainable development, by encouraging business and other organizations to practice social responsibility to improve their impacts on their workers, their natural environments and their communities.” (https://en.wikipedia.org/wiki/ISO_26000).

Social management systems are not as well-known as other ISO Standards. ISO26000 was launched in 2010 and is one of the many tools used by corporations to report on social impact. ISO 26000 is a document developed to provide guidance on what social responsibility is (ISO.org.). However, unlike other ISO standards, there are no formal requirements to audit and certify Social Management Systems based on ISO26000 nor is it regulated in any law or policy. It is only recognized internationally as a best practice guideline (ISO.org.).

3.3 Environmental and Social Management Systems at Anglo American Platinum

This sub-section gives a brief overview of Anglo American Platinum’s (AAP) “the business” systems (processes and procedures) used for environmental and social management. However, let’s first provide a short background on the organisation.

3.3.1 Anglo American Platinum Ltd

Anglo American Platinum (AAP) is a leading global mining company that produces platinum and other platinum group metals (PGMs) i.e. palladium, rhodium, ruthenium, iridium and osmium (AAP Annual Report, 2018). Gold, nickel and copper are by-products of PGM operations (AAP Annual Report, 2018). AAP accounts for about 37% of the world's newly mined production (AAP Annual Report, 2018). The other platinum group metals (PGMs) are produced in quantities determined by their occurrence in the ores mined (https://angloamerican.sharepoint.com/sites/esc-008). Figure 6 demonstrates AAPs operations in the Mpumalanga, Limpopo and North West provinces of South Africa.

Since the global economic slowdown in 2009, the company and the industry as a whole has faced various challenges associated with a weaker global economy and structural changes in the industry. This has impacted the sustainability of the company. In response, the company’s strategy resulted in the reshaping of its Rustenburg and Union mines in 2013, and decisions have

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been taken to exit certain mining assets, to optimise all operations and to reduce indirect (overhead) costs ( https://www.angloamericanplatinum.com/~/media/Files/A/Anglo-American-Group/Platinum/report-archive/2017/anglo-platinum-ore-reserves-report-2017.pdf). This is all based on the “….foundation of a value-optimising mineral asset portfolio”

https://www.angloamericanplatinum.com/~/media/Files/A/Anglo-American-Group/Platinum/report-archive/2017/anglo-platinum-ore-reserves-report-2017.pdf

Figure 3-5: Anglo American Platinum Operations in South Africa(AAP Annual Report, 2017).

All operations in the Platinum business unit have adopted (implemented and certified) environmental management systems that conform to the requirements of ISO 14001:2004. However, only the PMR and BMR operations in Rustenburg are currently certified to ISO14001: 2015 with the remaining operations intended to be fully certified by end 2020.

3.3.2 Environmental Management Systems at Anglo American Platinum Ltd

Anglo American Platinum have established, implemented, maintained and continually improve an EMS based on the requirements of ISO14001. All operations of the Platinum Business Unit (BU) conform to the requirements of ISO14001:2004 and have been externally certified by an independent certification body. However, an executive decision was taken in 2015 to discontinue external certification of ISO14001, except at the refineries (Precious Metals Refinery and Base Metals Refinery) where final products are dispatched to the market. These two operations were

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certified by an external body to ISO14001:2015 in 2017 and 2018, respectively. Nevertheless, the EMS was still being maintained internally at all the other operations within the BU that mine and process (concentrate and smelt) Platinum Group Metals (PGMs).

In addition to the ISO14001-based EMS, the Anglo American Group plc (Ltd) has developed the Safety, Health and Environment (SHE) Way which is “a management system framework that describes the systematic approach to the management of SHE-related risks and opportunities and how this integrates with business processes” (SHEWay, 2017:5). The SHE way is based on the Plan-Do-Check-Act cycle similar to that of ISO14001: 2015. This is described in figure below.

Figure 3-6: Map of Anglo American’s SHE Management System (SHEWay, 2017:6). The minimum intended outcomes of AAPs SHE Way are similar to those of ISO14001:2015 which are:

 Fulfilment of compliance obligations  Achievement of SHE objectives  Appropriate control of SHE risks

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Anglo American further developed various other mandatory performance standards that cover key areas and SHE aspects and impacts. These standards contain mandatory, high level requirements set at a corporate level. They support the Anglo American SHE Vision, Principles and Policy and outline the required approach to avoiding or minimising the potential adverse SHE impacts associated with the organisations activities, services or products. Each performance standard is supported by guidelines or tool boxes (e.g. Mine Closure Toolbox). These standards are known as the Group Technical Standards (GTS) and include Social and Environmental Impact Assessment (S&EIA), Water, Air Quality, Mineral Residue, Non-mineral Waste, Hazardous Substances, Biodiversity, Rehabilitation and Mine Closure.

3.3.3 Social Management Systems at Anglo American Platinum Ltd

The Anglo American Social Way (AASW) is the governing framework for social performance (AA Social Way, 2014) for all Anglo American operations. In other words, it is the social management system for Anglo American. It sets out a vision for managing social risks and opportunities, principles, policies and systems, requirements and performance expectations (AASW, 2017). The AASW applies to all managed operations of Anglo American throughout the entire mines’ life cycle (from exploration to post-closure) (AA Social Way, 2014). The intended outcomes of the AASW are to:

 Improve governance of Social Performance

 Improved impact and impact management (avoid, prevent, mitigate negative risks and impacts and optimisedevelopment opportunities and positive impacts)

 Enhance relationships

 Maintain socio-political license to operate (reputation, legal license to operate, access to land and ability to operate (AASW, 2014).

The principles of this framework are:

 “Deliver a lasting positive contribution to communities.  Manage risks and impacts

 Respect human rights

 Engage with affected and interested stakeholders  Empower vulnerable marginalised groups

 Integrate social performance within relevant operational processes” (AA Social Way, 2014).

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G O V E R N A N C E

The Social performance management system is based on the PDCA cycle (figure 7), influenced by governance and RACI which stands for Responsible, Accountable, Consulted, Informed.

Figure 3-7: The Anglo American Social Performance Management System (AASW, 2017).

The Socio-Economic Assessment Tool (SEAT) has been developed as part of the process of managing socio-ecological challenges more responsibly and continues to be the foundation of the AASW. SEAT assists the organisation to understand the socio-economic impacts (both positive and negative) of their activities (SEAT, 2015). Also developed to give effect to the AA Social Way are the Social Management Plan (SMP), Stakeholder Engagement Plan (SEP) and the Social Commitment Register (SCR).

Anglo American has not adopted any internationally recognised SMS standard. They use the ASW as the tool to manage the social aspects of the organisation.

3.4 Environmental and Social Management Systems: The International Context

The United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro, Brazil in 1992 has put immense pressure on industries and business to be more responsible with how they manage social and environmental aspects (Mutti et al., 2012; Perotto

Engage

Plan

Do

Check

Act

R A C I

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Prior this summit and from the beginning of the industrialization era, there was not much consideration given to responsible environmental management and holding corporations responsible and accountable for social and environmental impacts arising from their activities, services and products (Mutti et al., 2012).

As a result, many mining corporations continue to face increased pressure from stakeholders to, not only manage the impacts of their activities, services and products in a responsible manner, but also to add some socio-economic value to the affected (host) communities within which they operate. Several authors, (Babi et al., 2016; Mutti et al., 2012) state that the mining industry faces this challenge as the industry naturally exploits and depletes non-renewable resources. On one hand, development projects across various industries (mining, housing, energy, water infrastructure, etc.) are under pressure to ensure that projects are sustainable - achieving a net balance between social, economic and environmental pillars for the benefit of current and future generations (ISO, 2015; Mzembe & Downs, 2014; Zhang, 2000). On the other hand, there is increasing pressure from society about the acceptance and tolerance of how such corporations manage developments and associated impacts. The expression of such concerns has enabled stakeholders, particularly secondary stakeholders, to have the power to influence an organisations license to operate (Babi et al., 2016; Litmanen et al., 2016; Moffat & Zhang, 2014; Prno & Scott Slocombe, 2012) thereby, threatening the survival of the business.

The normative definition of stakeholder used in this research is by Colvin et al. (2016) which is any and all people who have some degree of interest (including moral interest) in an issue. In this context, secondary stakeholders are those who do not have a direct interest in an issue but have the power to influence the business. González-Benito et al. (2011:1623) emphasizes that “great environmental pressure or stakeholder influence increases the organisations interest in developing and adopting sustainable practices”.

There are other avenues used to manage organisations’ social impacts such as the International Financial Corporation (IFC), Global Reporting Initiative (GRI), United Nations Sustainable Development Goals (UN SDG), etc. These entail some measures that hold organisations accountable for social performance/management.

3.5 Conclusion

Management systems are generally an important part of the running of any organisation, regardless of its shape, size, and/or activities. This chapter has critically reflected on the existing literature related to Environmental and Social Management Systems. The purpose of this chapter was to outline the processes used by Anglo American Platinum for managing risks and/or

The opportunities in aligning environmental and social management systems - a South African mining case study