DENVER—Newmont Mining Corp., which has battled Peruvian labor disputes and Indonesian pollution charges, should improve relationships in communities where it operates to expand successfully, a new study concluded Monday.
The report, spawned by a shareholder resolution, which was endorsed by the board and approved in 2007, identified eight steps for the gold mining giant to take to foster better relations.
“If Newmont is to continue to grow as a company, maintain its production pipeline and succeed in current and future business operations around the world, it must manage community relationships more effectively,” the study concluded.
Newmont’s executives and board of directors agreed to review the details and implement as many of the recommendations as possible.
“While we have strong and responsible company policies in place, we clearly have work to do to ensure our implementation is reliable, consistent and accountable,” Newmont Chief Executive Officer Richard O’Brien said in a statement.
The Newmont study was unprecedented, said Tony Hodge, a former Canadian university professor who is CEO and president of the International Council on Mining and Metals.
“My sense is that this kind of review is just the beginning of something that is going to become much more common,” said Hodge, who chaired an independent advisory panel that helped design the study’s methodology.
The Community Relationships Review Study was commissioned after a group of shareholders led by Christian Brothers Investment Service expressed concern about conflicts Newmont faced around the world.
In 2007, for example, Newmont was cleared of charges that it polluted Buyat Bay in Indonesia. Newmont executive Richard Ness and Newmont were found not guilty of dumping dangerous amounts of toxic waste into the bay in a separate criminal case.
The previous year saw the Denver-based company grappling with a labor strike at its Yanacocha mine in Peru.
The study group examined five sites: Minera Yanacocha, Peru; Ahafo, Ghana; Martha Mine, New Zealand; the Batu Hijau Mine, Indonesia; and Carlin operations, Nevada. It also conducted a limited review at Minahasa Raya Mine, Indonesia.
Among the recommendations were to develop a comprehensive management plan for community relations and assign accountability to local and regional managers for implementing policies.
The company also should conduct regular social impact and risk assessments; manage community concerns before conflict arises and establish grievance procedures, the study said.
Julie Tanner, corporate advocacy coordinator for Christian Brothers Investment Services, said Newmont now needs to create programs that consider how project risks, benefits and costs can affect communities.
She also said she is impressed with the company and the board’s efforts to understand community resistance and to develop programs to address the concerns of the communities in which they operate
Newmont spokesman Omar Jabara said the company is crafting a plan to conduct meetings in its host communities and discuss the study findings. Implementation plans are in the development stage.
“We won’t understand the full cost of implementing the…recommendations until our action plans are complete,” he said.
Shares of Newmont closed down $1.11, or 2.9 percent, at $37.79 on Monday.
