PanAust Limited is a leading copper and gold producer in Southeast Asia, with its primary production operations in Laos and a corporate office based in Brisbane. In 2011, the company acquired a majority share the Inda de Oro Copper-Gold Project in Chile, giving PanAust a stake in one of the world’s richest copper-producing regions. In preparation for its international expansion, in 2010 PanAust established two distinct business units: PanAust Asia (which oversees mining operations in Laos and Thailand) and PanAust South America.
‘Growth Through Partnerships’ is thus a fitting title for PanAust’s 5th annual sustainability report, and in many ways this publication reflects the company’s international context through adherence to global sustainability standards and guidelines. With greater alignment between PanAust’s sustainability strategy and targets – and more use of KPIs to drive performance improvements – future versions of the report can do an even better job communicating the company’s sustainability performance and position PanAust amongst leading reporters in their industry.
‘Growth through Partnerships’ does an admirable job of integrating GRI reporting guidelines into a well-structured and user-friendly report. The report opens with an overview of the company’s Vision and Values, Governance Structure, and Sustainability Targets, before addressing material issues in six primary areas: Economic Performance, Stakeholder Engagement, Environmental Performance, Community, Health and Safety, and Respecting our People.
The governance and stakeholder engagement sections of ’Growth through Partnerships’ are particularly comprehensive. Stakeholder groups are clearly identified, along with relevant issues/concerns and the engagement approach used by PanAust for each one.
In the ‘Targets’ section, a long list of sustainability goals are set out along with a summary of progress to date and future targets. This could be a useful snapshot to gauge PanAust’s overall sustainability performance, but unfortunately the targets aren’t organised by material issues or aligned with the overall report structure. Hence, it’s challenging to evaluate the comprehensiveness of the targets or determine how they support the company’s overarching sustainability strategy.
PanAust provides the quantity of environmental disclosures one would expect from a mineral and mining company; however, no clear environmental targets are included to provide important context for the data. Although the report discloses year-by-year data on environmental expenditure, waste inventory, and water/fuel usage by site, along with statistics on environmental incidents, this data is presented with minimal context. For example, it is difficult to know whether trends in the data are a result of growth in the business, external factors, or new policies and initiatives. It would be very helpful to have a summary of environmental impact areas, targets and objectives (ideally supported by key performance indicators) at the beginning of this critical section.
Although PanAust’s report takes up a hefty 92-page pdf, overall the document is readable and accessible to a variety of audiences. The report is structured around broad categories such as Environmental, Community, and Health and Safety, and several of these categories would benefit from an index to help readers navigate through the multiple sub-sections within each chapter.
Although some of the sustainability targets are indexed with specific pages of the report, it would be useful to have page numbers provided for every target to align these with the report content.
PanAust Ltd uses a variety of external standards, guidelines, and principles to guide its reporting approach and assist with credibility. In addition to GRI, these include the IFC’s Performance Standards on Social and Environmental Sustainability, the ASX’s Corporate Governance Principles and Recommendations, the MCA’s Enduring Value Framework, the ICMM’s Sustainable Development Framework Principles and guidance on climate change, and the International Cyanide management Code. The use of these guidelines and external assurance lends substantial credibility to PanAust’s sustainability report and gives the reader confidence that PanAust has considered the full range of issues at stake for a mining company.
PanAust’s credibility is further enhanced by its candid disclosures of areas where the company has fallen short of its goals. For example, in 2010 PanAust performed an internal benchmarking audit against their sustainability standards, and areas of deficiency are clearly highlighted in this report. This candid disclosure of areas where PanAust needs to improve their performance demonstrates a strong commitment to sustainability governance and ongoing evaluation, and also inspires confidence in the report’s authenticity.
Looking ahead, perhaps the greatest challenge for PanAust will be to maintain a high degree of credibility in their reporting while adapting to very different international contexts. With a business that is now divided down the middle between South America and Southeast Asia (and a corporate presence in Australia), PanAust will need to set a strong internal direction for sustainability in order to navigate through multiple different policy and cultural environments. Continued consultation with international sustainability and mining standards will be a part of this approach, but the real key for PanAust will be to maintain a strong sustainability vision that cascades throughout the organisation – regardless of geography – and ties into its operational practices and targets.
1. Highlight the company’s most critical material issues within each broad sustainability category (community, environment, etc.)
2. Organise targets according to these material issues and sustainability areas
3. Enhance use of Key Performance Indicators (KPIs) to enable year-over-year comparison of performance and align these with the overarching sustainability strategy
4. Consider setting longer-term targets that extend beyond the next calendar year
Chelsea Reinhardt is an Associate at Net Balance, a sustainability advisory services firm with offices in Melbourne, Sydney, Brisbane and London. www.netbalance.com