Tampakan Project SD Report

Tampakan Project
Sustainability Report 2009
Contents
1 Xstrata Copper Tampakan Project 2 Executive General Managers message 4 General Managers message 6 2009 SD Scorecard and 2010 Targets 12 Our approach to sustainable development Xstrata Coppers Definition of Purpose Our strategic objectives Our values Precautionary approach 13 SMI Sustainable Development Policy Key sustainability challenges Awards for sustainable development 16 Governance and management systems Governance structure Human rights Child and forced labor
bribery and corruption Public policy participation & political contributions 20 Our operations and economic contributions Local suppliers Local business Local infrastructure 25 Case Study Progress in Barangay Kimlawis 26 The workplace and our people Safety performance Occupational health Home safety and basic first aid behavioral based Safety (bbS) Risk management Treatment for serious diseases Preparation for crisis and emergency
Employees Employing locally Employee training Employee performance evaluation Diversity and equal opportunity Non-discrimination policy 29 Case Study 5,000,000+ man hours with no LTI: The culture of safety in the work place and of safety in the work place and the community the community 31 Case Study Cultural induction: Key to culturally sensitive community Key to culturally sensitive engagements engagements community 32 Sustainable communities Community grievances Indigenous rights 36 Case Study The SMI public consultation process 37 Case Study Heritage Surveys: The culturally sensitive engagement The culturally sensitive approach engagement approach 38 The environment Environment Policy
Environmental incidents Water management biodiversity Air emissions Solid waste management Environmental management initiatives 41 Case Study Forest Inventory: Ensuring environmental best practices before and after operations 42 Case Study Lake Buluan Study: A critical milestone 43 Summary of key sustainability data 44 Global Reporting Initiative 45 Glossary
About Xstrata plc

Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. Xstratas businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with a growing platinum group metals business, additional exposures to gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders. The Groups operations and projects span 19 countries.
About Xstrata Copper

Headquartered in Brisbane, Australia, Xstrata Copper is one of the commodity business units within Xstrata plc. Its operations and projects span eight countries: Australia, Argentina, Chile, Peru, Canada, the USA, the Philippines and Papua New Guinea. Its operations are administered by five separate divisions, based close to the mining operations, namely the North Queensland, Minera Alumbrera, North Chile, Southern Peru and Canada divisions. It also has a recycling business (Xstrata Recycling) with plants in the United States and offices in Canada and Asia. Xstrata Coppers world-class portfolio of copper development projects includes Tampakan in the Philippines, Frieda River in Papua New Guinea, Las Bambas and Antapaccay in Peru and El Pachn in Argentina. Xstrata Copper is also developing the Energa Austral hydropower plant project in southern Chile. Xstrata Copper is the fourth largest global copper producer with attributable mined production in 2009 of 907,000 metric tons of copper in cathodes and concentrates. The company is also one of the worlds largest producers of smelter and refined copper, including from third party materials. It employs approximately 19,500 people, including contractors.
b TAMPAKAN PROJECT
Xstrata Copper Tampakan Project

The Tampakan Copper-Gold Project is located on the southern Philippine island of Mindanao, approximately 65 kilometers north of General Santos City. The Project is situated on the boundaries of four provinces: South Cotabato, Sarangani, Sultan Kudarat and Davao del Sur, and represents one of the largest undeveloped copper-gold deposits in the Southeast Asia-Western Pacific region. In 2009, the Tampakan Project entered into the final feasibility phase and commenced public consultations as part of its Environmental and Social Impact Assessment (ESIA). The Tampakan Project is a 2.4 billion metric ton deposit, containing 13.5 million metric tons of copper and 15.8 million ounces of gold at a 0.3% cut-off grade. It is operated by Philippine-based affiliate Sagittarius Mines, Incorporated (SMI), whose 40% controlling equity is a joint venture among Xstrata Copper (62.5%) and Indophil Resources NL (37.5%). The 60% non-controlling equity shareholders of SMI are the Tampakan Mining Corporation and Southcot Mining Corporation (known as the Tampakan Group of Companies). In December 2009, the Project employed approximately 252 employees and 1,065 contractors, including a weekly average of 202 local community residents, to support the Projects exploratory drilling and other operational needs.
Map of Operations
Manila Catanduanes Mindoro Masbate Samar Ley te Palawan Negros Cebu
MINDANAO Zamboanga Davao
Tampakan
Gen. Santos
SuSTAINAbILIT y REPORT 2009
Executive General Managers message

Xstrata Copper continued to advance its portfolio of world-class copper projects in 2009 and completed the year with solid improvements across all areas of sustainable development.
The dramatic fall in commodity prices and the global economic slow down in late 2008 continued to affect the mining sector in 2009. Xstrata Copper responded quickly and decisively to the deteriorating economic environment to ensure the sustainability of our operations and projects. As a result, we emerged from the downturn in a strong position when rising copper demand and prices began to ease the challenging economic conditions in the second half of the year. Despite the difficult business environment, Xstrata Copper made significant progress in advancing its portfolio of greenfield projects including the Tampakan Project in the Philippines, Frieda River in Papua New Guinea (PNG), El Pachn in Argentina and the Energa Austral hydropower project in southern Chile. We had a positive start to 2009 with the Frieda River project progressing into the pre-feasibility stage in January, reflecting the encouraging results of our extensive drilling program in 2008. Evaluation continued throughout the year and in January 2010, we announced a revised Mineral Resource estimate for the Horse-Ivaal-Trukai deposit which represented a substantial tonnage increase over the previously published estimate. The pre-feasibility study is scheduled for completion in the third quarter of 2010. The Tampakan Copper-Gold Project located on the southern Philippine island of Mindanao embarked on a uS$74 million feasibility study in June 2009 and commenced a comprehensive Environmental and Social Impact Assessment (ESIA) and stakeholder engagement process. In October 2009, the Projects Mineral Resource estimate was also updated. The feasibility study is scheduled for completion in the second quarter of 2010. We continued to undertake engineering studies and environmental impact assessments for the Energa Austral hydropower project in southern Chiles Aysn Region which comprises three power plant facilities and a dedicated transmission line. The ESIA study for the Rio Cuervo power
plant facility was submitted to the Chilean government in August 2009, marking a significant milestone for the Project. The El Pachn project continued to update its previous feasibility study and undertook expanded environmental baseline studies. Following an analysis of the results from the previous years drilling program, a substantial increase in the Projects Mineral Resource estimate was announced in late 2009. I believe our ability to deliver these extensive work programs successfully while operating in such remote and demanding locations is testament to our commitment to working safely, sustainably and in genuine partnership with our stakeholders. These Sustainable Development principles are fundamental to our business model and guide our daily decision-making. Our projects also set Sustainable Development improvement targets and continually assess their performance against those objectives throughout the year. Our priority is zero harm and we aim to achieve this through a systematic approach to identifying, analyzing and managing the catastrophic hazards present in our work environment and the high hazard activities we undertake across our business on a daily basis. In 2009 our projects achieved some improvements in safety performance as a result of strong management focus in this area and the implementation of initiatives such as the positive attitude safety system (PASS). For the full year, our total recordable injury frequency rate (TRIFR) was 2.3 recorded injuries per million hours of work, down from 4.2 in 2008. Our projects also recorded a lost time injury frequency rate (LTIFR) of 1.5 in 2009 down from 1.7 in the previous year. The Tampakan Project remained LTI free for the entire year, achieving over 5 million hours LTI free in early January 2010. Tragically, despite these safety improvements, a fatal incident occurred at Energa Austral when an inflatable boat carrying personnel from a contractor company capsized on the
Cuervo River in south Chile causing the loss of three workers, Moiss Aros, Mario Mndez and Edgardo Rogel. Having reviewed our systems and processes in relation to this incident, our most pressing challenge for 2010 is to achieve our strategic objective of an injury-free, safe work environment to ensure that all our people go home safely at the end of each day. During the year our projects continued to focus on environmental baseline monitoring in key areas such as ground and surface water, soil and land use, biodiversity, meteorology and geotechnical studies. The Frieda River project maintained its aquatic biodiversity monitoring program for the Sepik River catchment area and commenced a terrestrial biodiversity survey, the first study of its kind to be conducted in the area in almost a century.
TAMPAKAN PROJECT
The ESIA study for the Rio Cuervo hydroelectric power plant was also submitted in 2009 by the Energa Austral project following a two year community consultation process. This is the first of four such studies to be undertaken by the Project which has the potential to serve as a new source of clean energy for Chile. While Xstrata Coppers projects are currently low energy consumers, we recognize the need to address climate change and we actively work to reduce greenhouse emissions and energy consumption, as well as fresh water use, wherever possible. We also recognize that at a project level, the key to effective greenhouse gas management is through the appropriate design of our proposed operations and, as such, the optimization of our projects greenhouse gas footprint is an important consideration in our development process. In 2009, our projects intensified their community and stakeholder engagement activities to ensure that local communities concerns and interests are being addressed in our project planning and design. Xstrata Copper is committed to advancing our projects in line with international best practices. Throughout the year we continued to work with our stakeholders to address key issues including land ownership, resettlement, free prior and informed consent, human rights, the provision of government services in remote areas and social and economic development. We also invested over uSD2.65 million on community initiatives in the areas of health, education, enterprise development, arts and culture and social development. Together with local stakeholders and partner organizations, we supported a wide range of activities specifically tailored to local community needs such as upgrading the only boarding school in the Calingasta municipality near the El Pachn project, delivering HIV/ AIDS awareness programs to communities in the PNG highlands, installing potable water infrastructure in villages within the Tampakan Project area and supporting skills training programs to increase employment
opportunities for communities near Energa Austral. As we move into 2010, we anticipate that continued improvement in Western economies will drive a recovery in copper consumption, providing a more positive economic environment for our business. We will continue to progress our portfolio of greenfield projects and we look forward to completing the Tampakan Project feasibility study in the first half of 2010 followed by the Frieda River project pre-feasibility study by the end of the year. In 2010 we also expect to finalize the ESIA for the Tampakan Project and Energa Australs Rio blanco and Lago Condor hydroelectric plants. After a comprehensive review, we will also be implementing in the second quarter of the year a new Sustainable Development Policy and Management Framework that will replace and incorporate our current Safety & Health, Environment and Community policies. Training and revised induction procedures at all of our sites will form a crucial part of the implementation plan. Each year our projects publish individual Sustainability Reports that seek to address the material issues that have been raised by local stakeholders as well as those which Xstrata Copper considers essential to achieve our high standards in Sustainable Development. These reports also detail our performance against our targets and outline new objectives for the coming year. I hope that you find this report a valuable source of information not only about the Tampakan Project, but also about the Sustainable Development principles and objectives that guide all of Xstrata Coppers business activities.
At the El Pachn project, environmental baseline studies were supported by the installation of cutting-edge meteorological and water monitoring stations. With this advanced technology now in place, we look forward to gaining further insight into the climate, landscape and water resources of this remote part of Argentina. For our more advanced projects, the preparation of ESIA studies was also a priority throughout the year. In the second half of 2009, the Tampakan Project team met with 94 stakeholder groups as part of its ESIA process and held four public meetings attended by over 2,863 people. Through these forums we have received valuable feedback that will be incorporated into the Tampakan Projects design and planning along with the results of our specialist studies.
Peter Forrestal Executive General Manager Project Evaluation
General Managers message

Xstrata Copper is committed to developing a financially successful project that improves the social and economic prosperity of the region for future generations.
I am pleased to present the Tampakan Projects third Sustainability Report. This report submits in detail SMIs Sustainable Development (SD) performance as well as the challenges faced and milestones achieved by the Tampakan Project for the year 2009. 2009 ushered in new challenges for the Tampakan Project. After having completed a 21-month extended pre-feasibility study in December 2008, we began preparatory work for the Projects feasibility study during the first half of 2009. In June, we formally embarked on the uSD74 million feasibility study, due for completion by the second quarter of 2010. Together with sustained improvements in our governance and management systems and continued adherence to our Sustainable Development Policy, we progressed the Environmental and Social Impact Assessment (ESIA) in collaboration with the Projects stakeholders from the community, government and private sectors. As mandated by law, specifically the 1995 Philippine Mining Act and the Indigenous Peoples Rights Act (IPRA), we commenced the process of securing Free and Prior Informed Consent (FPIC) from our host communities. Pre-scoping and public scoping meetings, consultations, and assemblies were conducted for both the ESIA and the FPIC. A total of 94 stakeholder groups, approximately 1,500 individuals, were engaged in a series of 43 small, private consultation meetings from September to December 2009. Four public scoping meetings were held from 17 to 20 November 2009. This was a key milestone for the Tampakan Project ESIA approvals process, reaching a cross-section of sectors composed of 415 leaders in Tampakan, South Cotabato; 375 in Kiblawan, Davao del Sur; 367 in Malungon, Sarangani; and 430 in Columbio, Sultan Kudarat. We are honored that our commitment to building sustainable communities was recognized by our partners and stakeholders
in 2009. The Regional Minerals Development Council (RMDC) and Regional Development Council (RDC) of Region XII named the Tampakan Project as Flagship Project and, together with RMDC XI, recommended to the Mindanao Economic and Development Council its adoption as Mindanaos Flagship Project in Minerals Development. The title not only gives distinction to the Projects current and potential contributions to the region, it also gives credence to the companys vision of the Tampakan Project as a model for responsible and sustainable minerals development in the Philippines. Consequently, the Tampakan Project was proposed for inclusion in the Regional Medium Term Development Plan (RTMDP) since the promotion of minerals development as a major industry and economic catalyst was sought by the concerned RMDCs and RDC. Our commitment to the principles of sustainable development was again recognized
in 2009. SMI received the Presidential Mineral Industry Environment Award (PMIEA) in November 2009 from the Philippine Mine Safety and Environment Association. The PMIEA is the highest award given to a mining company in the Philippines for outstanding environmental practices. In 2009, the following technical studies were completed as part of the ESIA: Soils mapping and land use assessment within the Project area Flora and fauna surveys Noise assessment and modeling Visual amenity surveys, and Coastal marine surveys
A detailed surface water model is also being developed as part of the feasibility study. This work continued in 2009 as part of the feasibility and ESIA program.
TAMPAKAN PROJECT
stick insect culture, and technical assistance; and training for partners and volunteers. Rehabilitation is also a key activity across the Project to ensure that areas disturbed by the drilling program are returned to a stable land form. While all these were accomplished in 2009 at the height of the global financial crisis from which no country or industry was thoroughly insulated, there remains for 2010 the challenge of completing the Tampakan Project feasibility study and securing FPIC from our host communities. We will once again rely heavily on the trust and confidence of our partners and stakeholders that have been the most important driving force behind our successes in 2009. We will continue to be motivated by the vision of building sustainable communities, and our strongest commitment to health and safety, environmental management, respect for culture, social responsibility, and sustainable development. In the spirit of the Philippine governments policy declaration that mining is a key driver of our economy and an important sector that is bringing in significant levels of investment, creating jobs for the people and spurring exports, we continue to view the Tampakan Projects milestones both as essential steps towards its eventual operation, and also proof that responsible minerals development can and will bring about genuine and sustainable development for Mindanao and the country. The Tampakan Project shall continue to be a genuine partnership between the company and our government and community stakeholders. We thank you for your continued support.
SMIs safety performance has continuously improved registering no Lost Time Injury (LTI) throughout 2009. An LTI was last recorded in May 2008. We attribute this performance to our strong commitment to the goal of zero harm and to our Safety and Health Policy and Procedures, the ultimate objective of which is to create and sustain injury-free, healthy work environments for all in our workplaces. We continue to invest in health and safety capacity-building training programs within the company and in the community. While we continue the exploration of a vital natural resource expected to benefit both the nation and its people, we continue to invest in skills, education, health, social and enterprise development that lead to economic benefits and sustainable communities beyond the life of our proposed operations.
In 2009, SMI paid local suppliers a total of PhP328 million (uSD7 million) for goods and services: PhP136 million (uSD3 million) for goods and PhP192 million (uSD4 million) for services. We employed 252 people (more than 98% of whom are from the Philippines, with more than 80% coming from the Project area and environs) and 1,065 contractors in 2009. SMI spent PhP79 million (uSD1.67 million) on a range of Corporate Social Involvement (CSI) programs that covered education, livelihood and capacity-building ventures, providing real and long-term benefits for local communities. Over PhP18.56 million (uSD391,808) was spent on environmental projects including field trial research to enhance local biodiversity; production of seedlings for both reforestation programs and the propagation of endemic species; vermiculture, bee culture,
Mark Williams General Manager Tampakan Project
Targets and Scorecard

2009 Targets SAFETy Zero Fatalities Full year TRIFR Full year LTIFR Full year DISR Full year DIFR < 3.4 < 0.9 < 2.5 < 1.3 0 0 0 0 0 Ongoing Attained Attained Attained; Average Department Quarterly Audit for Q4 of 2009 is 70% Done Done 80% accomplished Attained Ongoing Attained Done Done Attained Attained Status
Complete the training of key SMI personnel on project response and recovery Achieve full compliance to the requirements of the Mines and Geosciences bureau (MGb) and Department of Labor and Employment -bureau of Working Conditions (DOLE-bWC): Zero safety fines or penalties All Departments achieve a Safety Quarterly Audit score of >65% in Q4 Two emergency drills per site (internal only) One emergency drill with external services Complete 90% of corrective actions raised in 2009 and 95% of all preceding actions CSHEC (Committee on Safety, Health, Environment and Communities) meeting attendance of >85% An average of 50 behavioral based Safety (bbS) observations per month for drivers and a total of 100 per month for other work groups Continue monitoring and implementation of 17 SD Standards. Conduct SD Audit by Q2 2009 Develop Emergency Response Team to all Camps by Q3 2009 Sustain Safe for Work program implementation to achieve a drug and alcohol free workplace Maintain zero incidents related to drug and alcohol
2010 SAFETy Targets Zero Fatalities Full year TRIFR Full year LTIFR Full year DISR < 3.4 < 0.9 < 2.5
Full year HPRI and CI 1.0 Hazard Reports of 30 per month 200 behavior-based Workplace Observations (bbWOs) per month Train contractors on SMI Sustainable Development Standards All Departments achieve a Safety Quarterly Audit score of >70% in Q4 Conduct contractor information workshop to explain the SMI Occupational Safety and Health Management System (OSHMS) and coach contractors in safety management Develop training matrix and improve present training packages Develop a joint plan with CCSD on a community safety training program
TAMPAKAN PROJECT
2009 HEALTH Targets Zero occupational illnesses Develop functional capacity guidelines by identifying all employment positions and functional capacities linked to those positions and formulate a database that will aid the doctors to decide return to work condition by end of Q4 Identify workplace health hazards, assess consequence probability, establish control measures and develop exposure limits by end of Q4 Establish control measures on health hazards in the work place
Status Attained Job Family Task Analysis not completed. Carried over to 2010 Workplace health hazards identified and captured in SMI health risk register Mitigating/control measures for health hazards have been designed and validated for effectiveness by the health consultant
2010 HEALTH Targets Zero occupational illnesses Zero new Hepatitis b cases Administer vaccine to field workers based on the risk exposure to the following biologicals: Tetanus, Typhoid, Hepatitis A, Hepatitis b, flu, and malarial prophylaxis. HIV-AIDS test in pre-employment medical requirement and annual physical examination (APE) for existing employees Continue internal/external health awareness campaign
2009 ENVIRONMENT Targets Develop and implement the Environmental Management System (EMS) so that it is compliant with ISO14001 Progress the Environmental & Social Impact Assessment (ESIA) process including the Public Consultation Process Achieve a cumulative average site EMS quarterly audit performance score of 75%
Status Targeted for 2008, ongoing as of December 2009 Attained; contributed to the completion of the public scoping activities for the mine footprint on November 2009 Attained; registered cumulative average of 83.3% with each quarterly performance score higher than 75% 25% achieved; for completion in 2010 75% complete; completion set for Q2 2010 Attained Ongoing
Develop and implement across the Project an effective environmental incident and complaints management system Complete the limnological study of Lake buluan No Category 3, 4 or 5 Environmental Incidents Prepare a biodiversity and Land Management Plan for the Project area
2010 ENVIRONMENT Targets undertake carbon cost impact assessment for project feasibility analysis No Category 3, 4 or 5 environmental incidents or fines, penalties or prosecutions Develop a Waste Management Plan Complete the mine site Environmental & Social Impact Assessment (ESIA) process including the Public Consultation Process Identify and integrate key HSEC systems (incident management, Audits and Risk) Commence phase 2 of the limnological study of Lake buluan social perception and education program Plan and commence rehabilitation cover and buffer zone planting trials Construct Community Information Center and expand the existing Field Trial Research Station
attained
ongoing
not attained
n/a = not applicable
2009 COMMuNITy Targets Support the achievement of key business performance indicators Effectively implement the ESIA stakeholder consultation process
Accomplishments
Conducted 43 Information, Education and Communication (IEC) PreScoping meetings and 4 Public Scoping meetings extending to 2,863 national, provincial and local stakeholders. Facilitated the establishment of 21 information and feedback booths within the project area.
Effective delivery of rights-based approach in the conduct of the FPIC process
On-going finalization of the Cultural Sustainability / Free & Prior Informed Consent (FPIC) Execution Strategy and Operational Plan Facilitated the Annual Planning of blaan Foundations and Tribal Councils
Effective implementation of involuntary resettlement plan
On-going finalization of the Sustainable Resettlement Action Plan On-going census of affected persons for resettlement On-going finalization of resettlement operations manuals
Effective deployment of resources to address key issues related to access to drill or exploration sites
Facilitated access to 89 drill sites
Spread the Projects benefits of growth in directly affected communities and surrounding areas as part of the companys value chain Develop and support community-based enterprises Developed six new enterprises on vegetable production, abaca production and handicrafts enterprises benefiting 204 farmers, 50 households, and 40 tribal women On-going finalization of the Cultural Sustainability / Free & Prior Informed Consent (FPIC) Execution Strategy and Operational Plan Facilitated the Annual Planning of blaan Foundations and Tribal Councils Support skills development and institutional capacity building of community based organizations and tribal foundations Improve the delivery of basic social services Invest in health Provide support to improve community-based health programs and access to quality health services Provide PhilHealth insurance for indigent members of the tribal communities Support the improvement of health facilities Help improve health indicators of children and women of reproductive age Invest in the development of culturally sensitive and sustainable traditional health program Support the campaign of the government to fight the five neglected tropical diseases Generate social acceptability through effective stakeholder engagement Develop strategic and effective Social Marketing Implementation Plan Organized 4 Community Mobilization & Partnership Days reaching 4 host municipalities covering 3 barangays and 2 tribal communities Conducted 10 project and mine visits participated in by tribal and non-tribal communities and representatives from local government agencies Develop and establish fair and equitable processes for engagement with indigenous peoples and local communities Develop community grievance mechanism Signed eight updated principal agreements, which established terms of engagement between the company and 6 local government units and 2 tribal communities. Established a grievance resolution mechanism Received 16 community grievances, 53% less than the 2008 tally of 32 Resolved 15 community grievances. The 1 remaining grievance related to site rehabilitation is being processed Mainstream and popularize the practice of Voluntary Principles on Security and Human Rights (VPSHR) Conducted a Trainers Training on VPSHR participated in by 34 individuals composed of 21 employees and 13 stakeholders from local NGOs, local government agencies and the military. The training was facilitated by the uS-based business for Social Responsibility (bSR) which is a co-secretariat for the global efforts of VPSHR Oriented 187 security guards on the companys policies and guidelines that promote the protection of human rights Constructed 1 maternal birthing center Enrolled 3,011 community members to PhilHealth (health insurance) Constructed 3 potable water systems to help eradicate incidence of water borne diseases, benefiting 815 households Provided basic health services to 12, 236 community members Postponed, to be taken up in 2010 Provided filariasis elimination and deworming services to 259 community members Provided technical assistance on organizational development to five community-based organizations, 13 barangay local government units and 22 tribal councils. Approved 20 community infrastructures (including nine already completed) benefiting 2,722 households and 517 students.
Effective delivery of rights-based approach in the conduct of the FPIC process
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Forge partnership with credible organizations
Forged partnership with: The Philippine business for Social Progress (PbSP), a leading business collective in the country, for the implementation of SMIs initiative on the Voluntary Principles on Security and Human Rights Partnership with uN Program for Human Settlements (uNHS) for sustainable resettlement Cor Jesu Foundation, a leading academe based NGO in Davao del Sur for the production of psychosocial preparation n modules for the FPIC process Ateneo School of Environmental Governance in the conduct of a stakeholder governance training in mining provinces Asian Institute of Management (AIM)s Ramon V. del Rosario Center for Corporate Social Responsibility (CSR) for the production of a case study on CSR in the Mining Sector featuring SMI
Invest in education Contribute to the provision of quality education through multistakeholder governance in local education system, teacher training and improvement of school facilities Implemented Synergeia Program (a community-based education management initiative) in 15 elementary schools Trained 40 teachers on IP Curriculum integration Subsidized salaries of 18 teachers Provide support to increase access to primary education Provided scholarships for 14,332 elementary, high school and college students
Promote the concept and practice of sustainable development in the communities in the Project site Mitigate biodiversity loss and improve the quality of the environment by progressively rehabilitating the Project site through the establishment of buffer zones Produced, distributed and planted more than 126,000 seedlings in cooperation with various local groups Reported illegal mining and farming practices to concerned agencies Strengthen components of the Field Trials & Research Stations (FTRS): diversified farming technology, organic farming, sloping agricultural land technology Develop Community-based Disaster Preparedness program Establish a multi-stakeholder mechanism to monitor the Projects environmental performance Maintained two FTRS centers in Tampakan (Liberty Farm) and in Kiblawan Recommended further FTRS site options for development Postponed, to be taken up in 2010 On-going development of a program plan for developing multistakeholder monitoring teams, which will cover the companys environmental, socio-economic and cultural sustainability performance
2010 COMMuNITy Targets Stakeholders Engagement Gain acceptability of the Project among stakeholders through meaningful and open engagements within the onsite and offsite mining development areas as well as indirectly affected communities Free and Prior Informed Consent (FPIC) Gain consent from the indigenous peoples (IP) communities for resettlement and mining operations Enable IP traditional institutions to develop their Strategic Plans based on the Ancestral Domain Sustainable Development and Protection Plan (ADSDPP) and IP Development Plans (IPDP) Sustainable Resettlement Roll-out the Sustainable Resettlement Action Plan to LGus and affected persons and implement the plan as scheduled Community Socio-Economic Sustainability Address key community issues related to access to drilling to complete the technical and geological studies for construction. Support the enhancement of management systems of local government units and government agencies to improve the delivery of education and health services and support the achievement of the millennium development goals Complement the governments initiatives to enable the community to develop and implement job-creating community-based enterprises Community Environmental Sustainability Implement a reforestation program in partnership with LGus and community-based organizations that complements socio-economic and cultural sustainability Sustainability Management System Institutionalize community engagement management system across the business to ensure the continuous improvement of policies and procedures throughout the different phases of mining operations Monitor stakeholder perception and lead in the development of strategic initiatives to popularize the leading edge practices in corporate-community sustainability across the business
SuSTAINAbILIT y REPORT 2009 9
Scope of this report

This report details the economic, health, safety, environment and social performance of Sagittarius Mines, Inc.s (SMI) Tampakan Project from 01 January 2009 to 31 December 2009. We publish our reports annually and this is the third report produced by the Tampakan Project. A general description of both Xstrata Coppers and SMIs SD policies and standards has been provided in this report. The full text of these policies are published on the Xstrata website: http://www.xstrata.com/corporate/ commodities/copper/publications All monetary values are expressed in Philippine pesos and uS dollars at a conversion rate of uSD1 = PhP47.37 unless otherwise stated. The Tampakan Project report is one of 11 sustainability reports published by Xstrata Copper in 2010 that will report on 2009 sustainability performance. As part of Xstrata Coppers commitment to transparency and stakeholder engagement, all its operating divisions and major development projects are required to publish their sustainability performance annually. An overview of Xstrata Coppers sustainability performance is also provided in the Xstrata plc Sustainability Report. All these reports are available on the Xstrata sustainability website: www. xstrata.com/sustainability. The Xstrata plc Sustainability Report will be available from mid-April 2010.
Defining report content

Sustainable development topics or issues that are material to the Tampakan Project or have the potential to become material to the long-term success of our business have been prioritized in this report. We have aimed to provide a complete and balanced view of our sustainability performance tailored to the expectations and interest of our stakeholders. In determining which issues or topics are material to the Tampakan Project, we have considered:
The Global Reporting Initiative (GRI)

This report has been prepared in accordance with the Global Reporting Initiatives (GRI) Sustainability Reporting G3 Guidelines, the worlds most widely used sustainability reporting framework. These guidelines enable readers of our sustainability reports to benchmark our SD performance with respect to laws, norms, codes, performance standards and voluntary initiatives; and to compare our SD performance over time. A GRI index detailing how Xstrata Copper has addressed the G3 Guidelines within this report can be found at page 44 of this report.
Feedback on our sustainability performance and reporting from key stakeholders; Company-specific issues raised either directly or indirectly by external stakeholders including NGOs, governments, communities and investors; Industry challenges raised in industry associations and forums; Our business Principles; Sustainable Development (SD) framework, policies and standards; and Indicators and topics outlined in the GRI G3 Guidelines, International Council of Mining and Metals (ICMM) principles, and other best practice guidelines and initiatives.
Report assurance
The data management and reporting systems in place for the collation and aggregation of sustainability data and information are subject to Xstratas internal verification processes, and information in this report draws on the same data and reporting systems as the Xstrata plc Group Sustainability Report 2009. Independent, external assurance of Xstratas sustainability data, reporting systems and the Xstrata plc Group Sustainability Report is provided by Ernst & young. A brief description of the assurance process, its findings, the signed assurance statement and Ernst & youngs recommendations are provided in the Group report, available from www.xstrata.com from April 2010.
10 TAMPAKAN PROJECT
11
Our approach to sustainable development

We continually invest to improve our SD performance, ensure the efficient use of resources and maintain a safe and healthy workplace, creating value for our stakeholders and contributing to a sustainable environment.
Xstrata Copper is committed to balancing social, environmental and economic considerations in how we manage our business. Although the lifespan of our activities is finite, we aim to invest in skills, education, health, social and enterprise development that lead to economic benefits and sustainable communities that outlive our operations. We strive to preserve the long-term health, function and viability of the natural
environments affected by our operations and to maintain safe and healthy workplaces based on mutual respect, fairness and integrity. Xstrata Copper takes a systematic approach to setting targets, monitoring performance and reporting (both internally and publicly) against our targets in each of the key sustainability areas, as demonstrated in this report.
The Xstrata Copper SD Strategy and Management Framework is published in full on Xstratas website under: www.xstrata.com/corporate/commodities/ copper/publications The SD framework interprets and supports the Xstrata plcs SD policy and 17 SD Standards, which were revised in 2008 and is consistent with our Definition of Purpose.
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Xstrata Coppers Definition of Purpose

We will maximize value for shareholders by successfully growing and managing an industryleading portfolio of copper assets that deliver superior returns. We will achieve this in a safe, environmentally and socially responsible way, in open partnerships between our people and with communities, governments and other stakeholders.
We work ethically. We work responsibly. We work openly. We work together and with others.
Our values
Our decisions and actions will demonstrate the following values: Honesty Dependability Respect Confidence Ingenuity Courage Passion
Our strategic objectives

Injury-free, safe work environments Recognized leadership in environmental performance Reputation for social responsibility Realization of the full potential of ouripeople Achievement of the full capacity of our ouriphysical assets Cost competitiveness through the cycles Value creation through dynamic growth ouriand continuous improvement Effective implementation of common key ourisystems and strategies
Precautionary approach
Xstrata Copper takes a precautionary approach to the environmental management of its global activities. We use a comprehensive risk-based approach to manage the potential detrimental impacts of our activities. This approach means that even in the absence of evidence that environmental degradation is occurring or will occur, we take action to mitigate the possibility that it will.
SMI Sustainable Development Policy

Sustainable Development describes SMIs approach to ensuring the long term viability and continued success of our business activities. We invest in the long-term for the Tampakan Project, which provides a basis for social and economic development in the region. Although the lifespan of our activities is finite, we aim to invest in skills, social development, and economic benefits that outlive these activities. We aspire for the highest conduct in business as set out in our business Principles, to protect and enhance our corporate reputation and ensure our ongoing access to mineral resources. We aim to create value for our stakeholders by contributing to a sustainable environment through investments in our business to improve performance efficiency, to ensure the efficient use of resources such as water and energy, and to maintain safe and healthy workplaces. To ensure a harmonious relationship with our stakeholders, minimize risk and secure an ongoing license to operate, we aim to create mutual benefits for stakeholders, working in partnership with the various parties who have an interest in or are affected by our business.
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Key sustainability challenges

SMI continues to undertake extensive, open and transparent public consultation with stakeholders regarding the development of the Tampakan Project. Through these engagements, we received valuable feedback from our stakeholders and identified several key challenges, including: Open pit mining and the proposed South Cotabato Environment Code As part of the Projects extended prefeasibility phase, SMI undertook extensive technical studies, led by international specialists in mining, environmental management and engineering, to assess potential mining methods for the Tampakan deposit. These studies identified open pit mining as the most appropriate, economic and safe extraction method given the location of the deposit and the geology of the region. SMI is currently undertaking further specialist studies in key areas such as soil and land use, ground and surface water, terrestrial and freshwater biology, and site rehabilitation as part of the Tampakan Projects Environmental and Social Impact Assessment (ESIA). The results of these studies will be used to refine SMIs environmental management plan to avoid, minimize and mitigate potential impacts of any proposed operation. The Sangguniang Panlalawigan, the provincial legislative council of South Cotabato, proposed an Environment Code that contains a provision banning the open pit mining method in the province.
Should the Council pass the Code, the matter would become a legal issue between the Provincial Government of South Cotabato and the Philippine government. The Department of Environment and National Resources (DENR) and the Department of Justice (DOJ) have confirmed that the proposed ban contravenes the National Policy and the Philippine Mining Act of 1995. Sarangani Province to be part of the Project footprint Sarangani Province has been identified as an area that may be affected by the proposed mining operation. The addition of Sarangani to the final Project area may cause concern among some stakeholders. SMI is in discussion with local authorities and stakeholders about hosting possibilities, and given the challenge of facing a bigger environmental footprint and stakeholder population, SMI has engaged with the new stakeholders according to our business Principles, presenting the benefits the companys presence can bring Sarangani. We will continue to undertake extensive, open and transparent public consultation with stakeholders regarding the development of the Tampakan Project. Illegal small-scale mining activities SMI recognizes the potential environmental and health impacts of illegal small-scale mining activities in the Project area. We will continue to support sustainable livelihood programs and capability-building initiatives for local communities to provide alternate employment and income-generating opportunities for communities.
Distribution of economic benefits The distribution of economic benefits and excise taxes between national, provincial and local government units and how these benefits will be determined is a significant concern for regional stakeholders. SMI and its stakeholders are keen to ensure that the economic benefits from the proposed mine are invested into regional communities and are shared equitably among the provinces hosting the operations. SMI will continue to consult with national, regional and local governments, local communities and indigenous peoples regarding the distribution of economic benefits in accordance with the Philippine Mining Act and sustainable development best practices. The Tampakan Project currently delivers significant benefits to the host municipalities and surrounding communities in terms of employment, purchase of goods and services, taxes and other charges and community development projects. In 2009, the Tampakan Project contributed PhP1.3 billion to the Mindanao and Philippine economies and created direct employment for more than 252 people and 1,065 contractors, including a weekly average of 202 local community residents, to support the projects exploratory drilling and other operational needs. SMI continues to support community and social development programs in the areas of health, education, capacity building, livelihood and skills development, and in 2009 invested PhP79 million on these initiatives. For further information see pages 20 and 33 of the report.
14 TAMPAKAN PROJECT
Resettlement The Tampakan Project is one of the largest undeveloped copper-gold deposits in South East Asia and has the potential to significantly improve the quality of life of communities in the region. SMIs policy is to avoid the need for resettlement wherever possible. However, where resettlement is required, we will adhere to national laws and international best practices including World bank and the International Finance Corporation (IFC) guidelines. SMI has identified some lands within the proposed mine development area that will need to be acquired for the exclusive use of the mine which will affect around 850 households. Resettlement will only take place when SMI gains free and prior informed consent from affected land occupants, IPs and non-IPs. We will also partner with the appropriate provincial governments through the Provincial Development Councils (PDCs) and in the planning and implementation of SMIs resettlement program for the communities living within the Project area. SMI will undertake its consultation processes in accordance with the Philippine Indigenous Peoples Rights Act and in-line with international best practices. For further information see page 34 of the report. Security and human rights Xstrata has defined security and human rights as high-risk issues in the Philippines due to high levels of violence around the Tampakan Project area. The situation has exposed SMI to false allegations that it is involved in the training of local people as paramilitaries, and the use of militarization to influence communities to support mining activities. Criminal groups and individuals possess unlicensed firearms in the Project area that pose a continuing threat to community members. This challenge is being addressed by SMI through constant and regular dialogues with the local governments and authorities to explore the most appropriate and sustainable ways to ensure the safety, security, health and environment of Project stakeholders. SMI has adopted and externally promotes the Voluntary Principles on Security and Human Rights (VPSHR) and our major funding shareholder, Xstrata, is a signatory to the uN Global Compact. SMI does not engage public security personnel to protect our workforce or assets. We employ a licensed, private security service provider and we work closely with them to ensure all security personnel deployed to safeguard our people and assets have received appropriate human rights training.
The safety and security of our employees and contractors is our priority and we support a multi-stakeholder approach, where communities and national, provincial and local government units all play important roles, to improving security conditions in the Tampakan Project area and promoting peace and order in the region. For further information on SMIs approach to security and human rights, please see pages 17, 27 and 34. Food security SMI is committed to advancing the Tampakan Project in line with leading environmental and industry best practices and in partnership with our stakeholders. However, SMI continues to support local farmers in the region through our partnership with the Tampakan Farmers Federation, which represents over 3,000 farmers, and through our investment in community food security and livelihood programs. We are currently undertaking further specialist studies in key areas such as soil and land use, ground and surface water, terrestrial and freshwater biology, and site rehabilitation as part of the Tampakan Projects ESIA. The results of these studies will be used to refine SMIs site management plan to avoid, minimize and mitigate potential impacts of any proposed operation. Water security SMI understands that water quality and security are important issues for many of our stakeholders and our Project planning is focused on maintaining the long-term beneficial and equitable use of water resources in the Project area. As part of the extended pre-feasibility phase, SMI has undertaken extensive baseline monitoring studies to assess water quality, surface and groundwater flow, aquatic biology and rainfall in the region. We are currently undertaking further specialist studies on water management as part of the Projects ESIA. The results of all these studies will be used to refine SMIs engineering designs and water management plan to ensure downstream water supplies will not be adversely affected by the Tampakan Project. It is expected to employ a closed water system to recycle water within the operation which will minimize emissions to the environment. The water management plan is being developed based on extensive risk assessments and in the context of both climate change and water stress. For further information on SMIs water management plan, see page 38.
Awards for sustainable development

The Tampakan Projects commitment to sustainable development continues to be recognized. SMI was awarded the Presidential Mineral Industry Environment Award (PMIEA) in November 2009 from the Philippine Mine Safety and Environment Association (PMSEA). The PMIEA is the highest award conferred to a mining company in the Philippines for outstanding sustainable development practices. SMI received this same award in 2004 and 2006. SMI was also PMSEAs 2nd runner-up in the best Mining Forest Program (MFP) for exploration category. SMI received the best MFP award in 2006 and 2008. In December 2009, recognizing the socioeconomic benefits that may be derived from the project and the manner with which SMI operates, the Regional Mineral Development Council (RMDC) XII and Regional Development Council (RDC) XII named the Tampakan Project as Flagship Project for Region XII and, together with RMDC XI, recommended to the Mindanao Economic and Development Council its adoption as Mindanaos Flagship Project in Minerals Development. Governor Miguel Rene A. Dominguez, RMDC XII Chairperson, in the joint RMDC XII and RDC XII meeting in December said: SMIs track record over the past several years and its commitment to sustainable development, not only for South Cotabato but also for the other two regions and four provinces in which it operates, demonstrate they are worthy recipients of this prestigious title.
We strive to preserve the long-term health, function and viability of the natural environments affected by our operations and to maintain safe and healthy workplaces based on mutual respect, fairness and integrity.
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Governance and management systems

The highest standards of health, safety, environmental performance and community engagement thats the Xstrata commitment.
Governance structure
Xstrata Copper operates within the structure of Xstratas robust standards of corporate governance as set out in Xstratas Statement of business Principles and SD management standards. Further information about Xstratas governance mechanisms is provided in the corporate governance sections of the groups Annual Report and Sustainability Report.
This approach is supplemented by Xstrata Coppers own common systems and policies in the areas of safety and health, environment, community, risk management, human resources and sustainable development. Xstrata Coppers SD performance is monitored and evaluated by its SD Committee (renamed from Health, Safety,
Environment and Community Committee to reflect the continuing evolution and broadening scope of SD issues), that meets monthly. Through the Xstrata Copper board, the business units SD performance is regularly reported to the Xstrata Executive Committee. At the Tampakan Project, SMIs SD performance and issues are monitored
16 TAMPAKAN PROJECT
by the SD Committee (formerly the HSEC Committee), in compliance with the Philippine Mine Safety and Health Standards of the Mines and Geosciences bureau (MGb), and the Occupational Safety and Health unit of the Department of Labor and Employment (DOLE). SMIs Human Resources, Safety & Health Manager chairs the SD Committee that convenes department superintendents and officers, other employees, contractors and service suppliers. Once a month, the SD Committee explores local initiatives to ensure that quality assurance is achieved. To enable the SD Committee to identify key areas and create a road map for further development, the Tampakan Project, through an external third party audit, conducted a gap analysis on the adherence to Xstratas 17 SD standards. The results are as follows:
community members and other stakeholders to be treated with dignity in a manner that respects cultural heritage, traditions and norms. In areas where SMI employs security personnel (either directly or as contractors) to protect our people and assets, it ensures that appropriate human rights training has taken place. We diligently monitor compliance with our business Principles, SD policy and standards, in line with SMIs management standard for suppliers, contractor and partners. In April 2008, SMI became a member of business for Social Responsibility (bSR), a leading provider of socially-responsible business solutions headquartered in San Francisco and engaged it to conduct training on the Voluntary Principles on Security and Human Rights in General Santos City. SMI security staff and representatives of SMIs security contractors attended this training. SMI also worked with the government, the Chamber of Mines of the Philippines and a non-governmental organization (NGO), the Philippine business for Social Progress (PbSP), to train another 67 individuals working in government, business, NGOs and other mining companies to raise awareness of the Voluntary Principles across the region. In March 2009, a Trainors Training for SMI officers was conducted by bSR to institutionalize the Principles within SMIs systems and organization. In December, SMI commenced training for 182 uniformed security guards deployed within its offices and facilities in Tampakan and Kiblawan areas. The roll-out was assisted by three members of the staff of PbSP. Security services are provided by Catena Security, Inc. and Genric Holdings, Security and Risk Consultants. In addition, SMI employs a Security Advisor for Kiblawan to assist the Corporate Security Team in Davao del Sur, particularly in Kiblawan area, and a Regional Security Consultant to assist in the development and implementation of security strategies. In 2009, guidelines and systems were reinforced to guarantee the systematic monitoring of all suppliers, contractors, and partners to ensure that their operations comply with our business standards.
Child and forced labor

Our business Principles uphold the elimination of all forms of forced or compulsory labor and stipulate that no form of child or forced labor will be tolerated. All Xstrata operations report the age of their youngest employee or contractor on an annual basis and are audited through the internal audit risk management program. In adherence to the business Principles, the united Nations Declaration on Human Rights, and the Philippine Labor Code, the youngest employee of the Tampakan Project is 20, while the youngest contractor is 18.
Bribery and corruption

SMIs business Principles state that we do not offer, solicit or accept any form of inducement or bribe. The internal audit function, supported by KPMG, takes into account identified fraud and compliance risks associated with our key business activities, including the ethical performance expectations contained in our Statement of business Principles. In addition, SMIs Fraud Policy explicitly states that the organization will not tolerate any incidence of fraud committed by employees or others, either from within or outside the organization and will take immediate and serious action against those persons committing a fraud, irrespective of length of service or position. The Policy outlines the channels available for employees or others to safely and confidentially report fraud or other unethical behavior that is contrary to SMIs business Principles. Each SMI employee signs an agreement that s/he will comply with the Policy, and the agreement is renewed yearly. Information about the SMI Ethics Line is provided during the induction of new employees for the Tampakan Project. Sanctions for suppliers found to be involved in corruption includes the cancellation or revocation of accreditation with the company. In 2009, the Procurement team oriented contractors and suppliers on SMI Procurement Policies and Procedures, including SMI Fraud Policy. A Contractors & Suppliers Education program was also offered to local businesses to improve management of accounts, cash flow and the budgeting process. There was no incidence of corruption reported at the Tampakan Project in 2009.
The development and performance of the overall SD management systems required improvement, Social and Community Engagement processes were assessed as strong, and Communication and Engagement were also assessed as strong.
SMI respects both Philippine laws and the culture of the communities where it operates. Our activities in 2009 are proof of our commitment to working safely, sustainably and in genuine partnership with our stakeholders. These SD principles are fundamental to our business model and guide our daily decision-making. In June 2009 we embarked on a uSD74 million feasibility study. As part of the feasibility study the Tampakan Project team met with over 90 stakeholder groups and held four public meetings attended by over 2,863 people.
Human rights
Our business Principles are consistent with the principles set out in the united Nations universal Declaration of Human Rights and the International Labor Organization Conventions. For SMI, the main areas of focus are protecting the rights of employees and contractors to work for equal pay, to associate freely, and to work in a safe and healthy work environment. We observe nondiscrimination and fair treatment and legal rights, and support the rights of employees,
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Public policy participation and political contributions

Our business Principles prohibits political contributions of any kind. Xstrata plays an active role in a number of significant international and national industry organizations and multi-stakeholder groups, through membership, funding, provision of expertise and participation in committees and working groups. Xstrata Copper plays a similar role in organizations that are copper-specific and those that are unique to geographical areas where Xstrata Copper is the only Xstrata commodity business in operation. Key activities among Xstratas global public policy participation commitments are our membership with the International Council of Mining and Metals (ICMM), and our support for and involvement with the Extractive Industries Transparency Initiative (EITI).
In line with the policy, the Tampakan Project did not provide any financial or in-kind contribution to political parties or individuals in 2009. In the Philippines, by virtue of Executive Order No. 469, the Mineral Development Council (MDC) under the Office of the President is tasked to advance the government policy of responsible and sustainable development of the States mineral resources. The same presidential order provides for the activation of Regional Minerals Development Councils (RMDCs) in key regions where priority minerals development projects exist. SMI represents the Chamber of Mines in the Regional Mineral Development Council of Region XII (RMDC XII). Its presence in the RMDC is an extension of the inter-agency multi-sectoral partnership at the national and local levels of the Chamber of Mines.
We observe non-discrimination and fair treatment and legal rights, and support the rights of employees, community members and other stakeholders to be treated with dignity in a manner that respects cultural heritage, traditions and norms.
18 TAMPAKAN PROJECT
Principal memberships & associations

SMI makes an important contribution to the Mindanao and Philippine resources and business community, and the economic development of the region and country. As such, the Project actively participates in a range of industry and business associations and advocacy organizations, and continues to build relationships with the following: Chamber of Mines of the Philippines Philippine Mine Safety and Environment Association (PMSEA) Philippine Minerals Exploration Association Philippine Society of Mining Engineers Geological Society of the Philippines Society of Metallurgical Engineers of the Philippines Mindanao Association of Mining Industries Mindanao Association of Mining Engineers Regional Minerals Development Council of Region XII Provincial Mining and Regulatory board of South Cotabato Provincial Mining and Regulatory board of Davao del Sur Philippine Chamber of Commerce and Industry Philippine-Australia business Council Philippine business Leaders Forum Philippine business for Social Progress Mindanao business Council South Cotabato Chamber of Commerce and Industry Foundation, Inc. General Santos Chamber of Commerce and Industry, Inc. Australia-New Zealand Chamber of Commerce of the Philippines british Chamber of Commerce of the Philippines European Chamber of Commerce of the Philippines business for Social Responsibility International Finance Corporation (Philippines) Ateneo School of Government Asian Institute of Management Center for CSR Students in Free Enterprise Philippines
SMIs General Manager was accepted as a member of the PMSEA board of Directors in October 2009.
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Our operations and economic contribution

The Tampakan Project provides opportunities for local businesses and community projects, through government taxes and charges resulting in considerable benefits to Tampakan and its surrounding communities.
In 2009, the Project contributed PhP1.3 billion (uSD26.8 million) to the Mindanao and Philippine economy through: Employment of more than 252 people and 1,065 contractors, including a weekly average of 202 local community residents, to support the Projects exploratory drilling and other operational needs.
Annual wages in excess of PhP189.4 million (uSD4 million) PhP207.2 million (USD4.37 million) paid to government in taxes and charges of which PhP2.2 million (uSD46,500) was paid in taxes to local government units PhP27 million (USD608,000) in power and fuel charges
PhP328 million (USD7 million) for purchase of goods and services Community partnerships, sponsorships and donations totaling more than PhP79 million (uSD1.7 million)
If SMI receives the necessary permits, including FPIC for mining and resettlement, the future benefits of the Tampakan Project
20 TAMPAKAN PROJECT
as of the Pre-Feasibility Study include the following: The PhP260 billion (USD5.2 billion) in initial capital investment for the Project The anticipated total revenue stream to the Philippine economy in excess of PhP2 trillion (uSD40 billion) over the life of mine Employment opportunities for up to 8,000 to 9,000 during construction Employment for over 2,000 during operations; Other economic benefits directly emanating from the development of small and medium enterprises to support the Project like transport, construction, utility services, increased demand for agricultural products to sustain the operation of the mine, and
job opportunities that may be generated from the birth of enterprises and businesses as spurred by the Project.
Local suppliers
A supplier or contractor located and registered within the Project area (Tampakan, Kiblawan, Columbio and Malungon) is given priority if it has the capability to provide goods and/or services according to the criteria indicated in the procurement policy. Product suppliers are assessed based on the following criteria:
Capability to deliver the supplies on time Local supplier in the Project area On the other hand, service suppliers are assessed on the following: Commercial (prices, financial strength) Technical (resources available, quality of product and services, previous experience, ability to deliver on commitment, etc.) Compliance with Health, Safety and Environment standards
Prices and quality of product Proximity to the site where the supplies are intended for Availability and completeness of supplies/stores
Engagement and negotiation are conducted in the interest of the Company. Purchases of goods and services are made only through SMI accredited suppliers &/or contractors, who have undergone SMIs accreditation process.
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Tampakan Conceptual Mine Layout

as of October 2009
22 TAMPAKAN PROJECT
Local business
The Tampakan Project has helped boost local livelihoods where its facilities are located. Local businesses like construction, manpower, transport, food, and supply services have grown in support of the Project. It has generated employment and a marked increase in family income, contributing to improved literacy and skills in the process. Locals now also have better access to basic health services with the enrolment of community households with PhilHealth insurance and through the numerous medical and dental missions conducted regularly in the Project area and in SMI exploration tenements. In 2009, SMI paid local suppliers a total of PhP328 million (uSD7 million) for goods and services: Goods Services PhP136 million (uSD3 million) PhP192 million (uSD4 million)
Local infrastructure
The Tampakan Project is committed to developing and maintaining infrastructure in the Project area and in expansion areas such as Malungon in Sarangani, Kiblawan and other Davao del Sur municipalities. In 2009, SMI provided community infrastructure support. Projects included: construction and rehabilitation of potable water systems and a reservoir, construction of one birthing and nutrition center, repair of a tribal hall, road opening and repairs, drainage installation, and upgrading of school facilities. Assessment and support of local needs is planned to continue through engagements with local governments, tribal councils and communities; compliance with the Free and Prior Informed Consent (FPIC) requirements and technical studies.
24 TAMPAKAN PROJECT
case study
Progress in Barangay Kimlawis

barangay Kimlawis is one of the Tampakan Projects host communities. It is in Kiblawan, a fourth-class municipality in the province of Davao del Sur. The center of Kimlawis bustles with activities. Stores selling anything from wet products to dry goods line the streets, crowds gather just a few steps from the barangay (village) hall, fresh farm produce is being sorted at the plaza, and modern concrete houses are being built one after the other. Suzette, the sister of barangay Captain Cristituto Duazo, tells the story of how community members now own vehicles where previously there were no more than two in the whole area. A key factor to this increase in the number of privately-owned vehicles has been SMIs investment in improving the road connecting Kimlawis to nearby areas, thus providing better access for movement of products and services. Company activities in 2009 in barangay Kimlawis contributed to the local economy an equivalent of PhP321 million for its exploration and environmental study activities in the area. This amount includes the employment of local labor, infrastructure investment for exploration support activities, rental of equipment and machines, and other incidental expenses incurred within the community. The amount does not include additional considerable community investment programs undertaken in partnership with our host community involving livelihood training and support, institutional development, and other community and environmental sustainability programs. The investments made by SMI and the jobs generated by Project activities are clearly having a multiplier effect in Kimlawis. This could not be taking place without the determination to bring progress and without the cooperation among the local government unit, the tribal council, the members of the community, and SMI.
The workplace and our people

We strive to create and sustain injury-free, safe work environments for everybody in our workplaces. Zero harm is our goal.
To achieve our goal of zero harm in the workplace, every employee is accountable for safety performance, training them to improve their safety knowledge and skills and make them aware that they have a responsibility to themselves, their family and friends to work and behave safely. We also ensure that every task undertaken in our workplace has a safe system in place and that our people have tools and equipment that are fit for specific purposes and well maintained to complete tasks safely and productively. Furthermore, our regular health
screening programs monitor our employees health, well-being and fitness. SMI uses a risk management system to identify, assess and eliminate or control safety risk. When an unsafe condition is identified or when a safety incident occurs, it is investigated immediately and action is taken to eliminate the risks involved. Safety auditing occurs regularly across our business to improve safety standards and practices, and our safety performance, safety initiatives and issues are regularly communicated to our people.
Safety performance
At the Tampakan Project, various safety programs have been implemented to provide education and training, counseling, prevention or risk control, and treatment for serious diseases. SMI also reorganized its safety department and created a community safety training role to work with the Corporate Community Sustainability Department (CCSD) to support safety awareness in the community.
26 TAMPAKAN PROJECT
SMI 2009 Safety Performance Monthly Moving Average

30
25
TRIFR 2008 TRIFR 2009 DISR 2008
DIFR 2008 DIFR 2009 DISR 2009
There were four other shooting incidents where no serious injuries were reported. Police investigations indicated the incidents were of personal nature and not companyrelated. SMI supports a multi-stakeholder approach to improving security conditions in the Tampakan Project area in which the communitys participation and support, as well as the national, local and provincial governments all play important roles. We will continue to work with the host communities, our security service provider, and the local authorities to promote peace and order in the region.
DEC
20
15
10
0 JAN FEb MAR APR MAy JuN JuL AuG SEP OCT NOV
TRIFR, DIFR & DISR (MMA)
Occupational health
SMIs Health and Occupational Hygiene standard is used to identify, assess and control occupational health hazards through practical and reasonable measures that, when
Xstrata requires all its sites to record and investigate all High Potential Risk Incidents (HPRI) as reporting and investigation of an incident, a hazard or near-miss incident are vital to prevention. Wherever possible, hazards are identified before these can result in injury. HPRI reporting can help achieve injury prevention by identifying potential hazards and solutions that can protect the workforce. Job Safety Environment Assessment (JSEA) and hazard reporting forms were launched within the company in 2009 in our effort to achieve zero harm. Since May of 2008, when an LTI was last recorded, SMIs safety performance continuously improved, registering no LTIs for the whole of 2009. In the 2009 calendar year, SMI logged a total of 3,210,614 man hours without LTI.
Security challenges
Xstrata is a signatory to the uN Global Compact, and SMI has adopted the Voluntary Principles on Security and Human Rights (VPSHR). With safety and security of employees and contractors as a priority, SMI is committed to work with local authorities and communities to continue to build constructive relationships with stakeholders, minimize risk, and secure an ongoing license to operate. No incident perpetrated by organized groups, e.g. New Peoples Army (NPA), was recorded in the Tampakan Project in 2009. However, on 26 July 2009, a uPD driller was fatally shot by an unidentified assailant in Nakoltana, bongmal, barangay Kimlawis, Davao del Sur. Authorities have prepared legal action to arrest and bring the suspect to court. The incident was of a personal nature and not company-related. The company was saddened by the incident and the company offered support to the family.
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implemented, help eliminate work-related illness and injuries. Health monitoring programs were strictly implemented at the Tampakan Project. Employees were given their annual health examination while new employees were required to undergo a pre-employment health examination. SMI also introduced a Hepatitis b vaccination program for all employees and the immunization program is part of its employment induction program. There were no occupational diseases recorded in 2008 and 2009.
Defensive Driving, accredited by the TESDA Radio Land-based Mobile Seminar Driver Safety Refresher Course Risk Management Training behavioral based System Program
Employee healthcare
Workforce members and their families receive statutory healthcare subsidies through the Philippine Health Insurance Corporation (PHIC), while premier private healthcare services for all employees and five qualified dependants are provided by IntelliCare, a third party Healthcare Maintenance Organization (HMO).
Behavioral Based Safety (BBS)

SMI adopted a program called behavioral based Safety (bbS) to give positive reinforcement of driving behavior with due emphasis on counseling. In 2009, SMI expanded the horizon in the implementation of the bbS. A generic behavioral based Workplace Observation (bbWO) was formulated applicable to any work activity. Seven bbS training sessions were conducted and attended by 59 personnel. The program stimulated the employees interest and cooperation in incident prevention by recognizing Safe and At-Risk behavior.
Preparation for crises and emergencies

The implementation of Emergency Crises and business Continuity, an SMI standard, ensures that appropriate resources and effective emergency response, crisis management and business continuity plans are in place to manage emergency and crisis situations. SMI updated its crisis response procedures in late 2009 to support the current and shortterm future state of the business.
Home safety and basic first aid

Regular employees and contractors were given special training on:
Snake bites First Aid and Emergency Response basic First Aid Orientation basic Emergency Extrication Orientation
SMI supports a multistakeholder approach to improving security conditions in the Tampakan Project area in which the communitys participation and support, as well as the national, local and provincial governments all play important roles.
Employees Origin Headcount

Tampakan Other areas in South Cotabato Province General Santos City Kiblawan 82 29 32 19 34 31 10 7 1 4 2 1 252
Employees and Contractors % Headcount

603 76 76 426 37 44 10 10 3 4 24 4 1,317
%
45.8% 5.8% 5.8% 32.3% 2.8% 3.3% 0.8% 0.8% 0.2% 0.3% 1.8% 0.3% 100%
32.5% 11.5% 12.7% 7.5% 13.5% 12.3% 4.0% 2.8% 0.4% 1.6% 0.8% 0.4% 100%
Employees
Total workforce by employment type, employment contract and region
Manpower Headcount
Regular Probationary Project Employees Secondees Sub-Total Contractors Total
Luzon Island Group Other areas in Mindanao Visayas Island Group Columbio Sarangani Province Australia Davao del Sur Province Sultan Kudarat Province TOTAL
Dec 2009
183 24 41 4 252 1,065 1,317
28 TAMPAKAN PROJECT
case study 5,000,000+ working hours with no LTI
The culture of safety in the workplace and the community

True to its goal of zero harm in the workplace, SMI recorded no incidents of injury or illness that resulted in the noncompletion of a work shift in 2009. between May 2008 and January 2010 SMI employees and contractors worked in excess of five million hours without Lost Time Injury (LTI). The record was achieved despite the challenges of transporting and operating equipment within urban conditions and across the rugged and mountainous terrains of southern Mindanao, also considering that SMI engages contractors from drivers, construction personnel, laborers to shortterm administrative personnel that increase potential safety concerns. SMIs Human Resources, Safety and Health Manager, Graham Almond, attributes the accomplishment of the five million hours LTI free to the acceptance by SMI employees and contractors to embrace the goal of zero harm. The safety measures we have implemented such as holding regular safety talks, departmental audits and behavior-based safety programs have been widely accepted throughout the business, Mr. Almond said. These measures have been key to reaching this significant health and safety milestone. In 2009, SMI also sponsored training on a Heavy Equipment Safety program in Kiamo, Kimlawis designed to promote a Culture of Safety among its host communities. Rogelio bong Quito, SMI Safety Superintendent, believes capacity building in the field of safety should be the companys legacy to its host communities. When SMIs operations are complete, the training we have conducted and its impact on the community will be our most significant legacy, Mr. Quito said.
Labor relations
Labor relations are a fundamental responsibility of operational management and we seek to have a direct relationship between our employees and line management founded on quality leadership, effective communication, mutual respect and trust. We consult with employees in advance on any significant operational change. SMI grants benefits to full-time employees that are not provided to project employees, such as Annual Vacation Leave and Sick Leave credits of 15 days each. Project employees are entitled to the statutory benefit of five days Service Incentive Leave (SIL) after completing one year of work.
SMIs standard entry wage rate for the lowest stratum is 9.2% higher than the local minimum wage. Workforce by role type
Position Level
Managers Superintendents Supervisors / Officers Rank and File Total Training Programs
As of December 2009 Headcount %

7 21 89 135 252 3% 8% 35% 54% 100%
New Memoranda of Agreements (MOAs) signed with host communities stipulate that SMI will give priority to the indigenous cultural communities (ICC) / indigenous peoples (IP) in the host barangays affected by its operation in any work capacity commensurate to their qualifications and fitness. In no case shall an IP applicant be considered for placement if s/he is not duly recommended by the concerned elder / leader of his tribe.
Employee training
SMI sends its employees to training on systems and procedures, including best practices that are to be applied in the Tampakan Project. In 2009, SMI spent PhP4.3million (uSD90,097) and 5,309 hours on training:
Employing locally
The Principal Agreements with host municipalities, barangays (villages) and tribal communities have individual provisions stating that SMI will give priority of employment (other than in security) in mining operations to competent and qualified long-term inhabitants living in the community.
Employee Training
Total Training Hours
Jan - Dec 2009

5,309 21.07 724 USD90,097 USD125 49
Average Training Hours per Employee Total Number of Participants Total Training Cost Average Training Cost per Employee Total Training Programs
Position
Senior Management Management Supervisors, administration, technical
Hours
23 1,135 4,149 2 5,309
Operational production, maintenance Total
Employee performance evaluation

SMI has adopted Xstrata Coppers global performance evaluation system and in 2009, proper feedback on employee performance, evaluation and career development reviews were completed as scheduled.
30 TAMPAKAN PROJECT
Diversity and equal opportunity

SMI employs a diverse workforce, to benefit from a varied range of skills, backgrounds and perspectives. It employs people based on the skills and experience required for each particular position, without discrimination according to gender, race, age, sexual orientation, religion, nationality or any other factor. The Projects workforce is currently 65% male and 35% female. As a policy, there is no difference in the basic salary of men and women. The salary scale is applied in the same manner regardless of gender.
Non-discrimination policy
As outlined in our business Principles, we value the contribution made by employees, and our policies and practices respect their personal dignity and rights. We do not tolerate any form of workplace discrimination, harassment or physical assault. There has been no incidence of discrimination reported in 2009.
To achieve our goal of zero harm in the workplace, every employee is accountable for safety performance.
case study Cultural Induction
Key to culturally sensitive community engagement

In 2009, SMI introduced a Cultural Induction program to provide its employees with a better understanding of the local culture, specifically that of the blaans. The Cultural Induction program consists of three modules that aim to provide staff and contractors an insight on how to relate with the blaans. discussion of the blaans history, belief systems, worldviews, customs and traditions Philippine ethno-linguistic groups by encouraging the participants to understand and respect cultural differences. by the end of 2009, a total of 173 contractors and employees from the companys various departments underwent the Cultural Induction program, enhancing their interaction with community members and overall cultural awareness.
The second module gives tips on practices that should be observed when in a blaan village, and dealing with blaans in an office setting The third module underscores cultural commonalities with other dominant
The first module is an introduction to blaan culture, through an extensive
31
Sustainable communities
Sagittarius Mines, Inc. (SMI) is proud of its reputation for social responsibility and we are committed to contributing to the social, economic and institutional development of the communities where we operate to improve the quality of life for all.
As outlined in our Community Policy, our community sustainability practices are characterized by open and honest engagement with all our stakeholders through effective, transparent consultation and communication. We consult and communicate with stakeholders regularly in culturally-appropriate and respectful ways, using materials that are easily understood, and provide feedback to issues raised in a similar way. We record, monitor and address community complaints through dialogue and open space engagement where everyones concerns are treated with importance and a sense of urgency. We continue to work on establishing fair and equitable processes for engagement with indigenous and local communities including, where relevant, the employment of a rights-based development approach to securing free and prior informed consent.
Recognizing the cultural diversity of the region as well as the demands of the Tampakan Project, we have taken a holistic approach to building sustainable communities that is both rights-based and culturally sensitive, balancing this approach with the companys own corporate sustainability.
The CCSD implements its programs in accordance with international and local development frameworks including the united Nations Millennium Development Goals (uN MDGs). The departments strategies are implemented by the following units and approaches:
The Corporate-Community Sustainability Department

The Corporate-Community Sustainability Department (CCSD) was established to ensure that the most important aspects of community life are given appropriate support, attention, and time, and that stakeholders are empowered as partners in building sustainable communities.
Stakeholder Engagement and Partnership (SEP) Team aims to strengthen cooperation with and among stakeholder groups affected by the company operations to promote the social acceptability of the Tampakan Project. Stakeholder feedback is incorporated into the companys dayto-day operations, and in the long-term will form part of the Environmental and Social Impact Assessment (ESIA).
32 TAMPAKAN PROJECT
Cultural Sustainability / Free and Prior Informed Consent (CS / FPIC) Team empowers tribal communities to manage both natural and cultural wealth. Ensures consent is given willingly and intelligently, through ways that are consistent with the law and are respectful of the tribal communitys indigenous culture. Sustainable Resettlement (SR) Team ensures that communities living in the Project area would be resettled in a manner that will improve their standard of living. Community Socio-Economic Sustainability (CSES) implements programs to broaden employment and business opportunities, to improve local infrastructure, and improve the capacity of local governments and tribal councils to deliver basic social services to their constituents. Community Environment Sustainability (CES) Team engages with communities, government offices, and nongovernment organizations through a multi-sectoral setting that seeks to protect the air, water, land and biodiversity in and around the Tampakan Project. Sustainability Management System (SMS) Team develops policies, systems and operating guidelines, monitors and evaluates program results and manages knowledge gained from program implementation experiences. It also regularly monitors the capacity of CCSD to deliver on commitments according to SMIs Sustainable Development Policy and CCSDs internal performance standards.
Corporate Social Involvement programs

The Community Policy is operationalized through SMIs various community sustainability initiatives which include its Corporate Social Involvement (CSI) programs. These are developed according to our Sustainable Development policy and standards and form an important part of our work with local communities. Through these programs, we develop community partnerships, to emphasize local capacity building, in the areas of arts and culture, education, enterprise development, environment, social and community development, and health. SMI also supports local businesses as part of the companys value chain and employs local people whenever possible to strengthen local and regional economies. Community feedback and results from the most recent perception survey show that the community sees SMI as a key source of economic opportunities and social services. The company is shifting its community sustainability strategy from direct servicing to capacity-building and enterprise development to create other sources of services and livelihood opportunities. In 2009, SMI spent PhP79 million (uSD1.67 million) on various CSI programs that covered education, livelihood and capacity-building ventures, providing real and long-term benefits for local communities. Education
SMI supported the monthly salary of 18 teachers in the communities of Tampakan, Tupi, Columbio and Malungon while the local governments of these communities seek the regularization of these salaries as part of the Department of Educations budget. Furthermore, 40 teachers were trained to make sure that the curriculum of their respective schools are culturally-sensitive. The Synergeia Foundation Program was implemented in 15 elementary schools. This program aims to improve the quality of basic education by actively engaging local government officials, parents, school officials, teachers and community leaders to participate in improving processes to enable the children to learn better.
Livelihood
Livelihood programs on new farming technology and farm support, banana, corn and potato production, dressmaking and other projects helped improve the lives of over 608 farmers and tribal members.
Health
A total of 14,332 elementary, high school and college students were granted financial support.
A vast number of households and individuals received much-needed care and cure through medical and dental missions in many communities. 3,011 households from the Project area and SMI exploration tenements were enrolled in PhilHealth, and became entitled to a range of health benefits for a year.
A number of infrastructure projects were implemented with the support of barangay councils and core group leaders including health centers, potable water system, water catchment and distribution systems.
Environment
Through the Maleh Tu Kayo reforestation program, more than 1,500 volunteers and 80 community and government organizations planted about 130,000 seedlings to provide the communities, in several years time, nourishment, shade, lumber and relief from soil erosion. Over PhP18.56 million (uSD391,808) was spent on environmental projects including field trial research to preserve local biodiversity; production of seedlings for both reforestation programs and the propagation of endemic species; vermiculture, butterfly and stick insect culture, and technical assistance; and training for partners and volunteers. Rehabilitation is also a key activity across the Project to ensure that areas disturbed by the drilling program are reinstated to a stable land form.
respond to reports linking Xstrata-SMI with the assassination of Eliezer boy billanes, who was a vocal critic of the Tampakan Project. SMI was deeply concerned by these unsubstantiated allegations and its response was posted on the bHRCs website. As many from the communities associated with the Tampakan Project will attest, SMI has always respected and will continue to respect human rights and the rights of stakeholders to express their views, including about the Tampakan Project. SMI engaged with Mr. billanes and his organization through various forums to listen to his opinions and concerns on several occasions without incident and with respect for his right to freedom of expression. SMI has adopted the Voluntary Principles on Security and Human Rights (VPSHR) and our major funding shareholder, Xstrata, is a signatory to the uN Global Compact. The safety and security of our employees and contractors is our priority and we support a multi-stakeholder approach to improving security conditions in the Tampakan Project area and promoting peace and order in the region. Regular, open and transparent consultation also remains to be SMIs thrust as it adheres to its business Principles when engaging with the Tampakan Project stakeholders. Thus, in 2009, SMI reviewed, developed, and improved several community engagement processes. Stakeholder engagement activities have included:
activities. Procedures for conducting Heritage Surveys and rehabilitation have been established.
Development of a framework for identifying community risks, maximizing benefits and mitigating potential negative impacts of programs and activities. Implementation of Stakeholder Consultation, Communications, and Consent Convergence Network (C-net). This system was established to capture stakeholder issues, comments, concerns, queries and suggestions, and to provide an opportunity for the company to respond appropriately. Development of a grievance resolution mechanism, managed by the Land Access and Negotiation group under the Community Socio-Economic Sustainability Team of CCSD, to provide an opportunity to resolve grievances and facilitate continued access to drilling sites. Cultural Induction for staff to help increase sensitivity and respect for the culture and traditions of the indigenous communities.
Stakeholder engagement
In February 2009, SMI met with representatives of the London-based Working Group on Mining in the Philippines regarding the launch of their book Philippines: Mining or Food. Human rights, particularly in relation to Indigenous Peoples and FPIC, were among the key concerns raised by the group. In March 2009, the business and Human Rights Centres (bHRC) invited SMI to
Community resettlement
Guided by appropriate international and local resettlement standards such as those of the united Nations, Asian Development bank (ADb) and International Finance Corporation (IFC), SMI developed a Comprehensive Sustainable Resettlement Plan that follows a development-oriented approach where resettlement is not about merely physically moving people. The plan details the proposed
Community consultations and Heritage Surveys prior to accessing target drill sites. This helped gain consent for access to the Project area and establish how an area should be rehabilitated after drilling
34 TAMPAKAN PROJECT
strategies and planned activities for each of the five operational components of the sustainable resettlement program namely:
Housing and Infrastructure Development Livelihood and Enterprise Development Health Services Delivery Improvement Improving Access to Education Social Infrastructure Capability building
Relocation, being an integral part of the program, and the guidelines for implementing it, are also outlined in the plan. A strategic partnership with the united Nations Human Settlements (uNHS) Program, also known as uN-Habitat, is being finalized to ensure that the companys resettlement initiatives adhere to international standards.
Aided by constant and standardized procedures that cover the operating areas of the company as well as its various contractors, the Grievance Management System has been put in place to help SMI avoid the development of possible conflict scenarios in the local area. It is also a constituent part of a transparent communication policy in line with international social standards. The system was created to meet corporate social involvement strategic objectives, and designed to align with local culture and practices, containing elements to promote its adoption by locals. In 2009, SMI received a total of 16 companyrelated complaints from various community members. These varied from issues concerning employment opportunities, land ownership, security, to crop and land use compensation. This represents a reduction of more than 50% from the 32 grievances filed the previous year. by December of 2009, 15 of the 16 complaints were resolved. There is an improvement in the process of reporting as well as resolving community conflict and complaints in 2009. There were no complaints recorded or processed for the months of May and July to October.
Indigenous rights
The development of the Tampakan Project would entail resettlement of affected persons and is likely to raise property rights issues. In the Philippines, the legal rights of the IPs over lands declared as Ancestral Domains are clearly protected through the Indigenous Peoples Rights Act of 1997 or IPRA. SMI, in the conduct of its business, ensures that at the minimum, the company adheres to all existing laws and regulations in the Philippines. Aside from compliance with national regulatory frameworks and Xstratas SD Standards, SMI uses international standards such as that of the united Nations Declaration on the Rights of Indigenous Peoples, World bank/International Finance Corporation Directives and Performance Standards, and International Labor Organization Convention 169 as benchmarks for its internal practices to protect and preserve the integrity and rights of the indigenous peoples. Cognizant of the need to protect cultural heritage, in line with Republic Act (RA) 4846 or the Cultural Properties Preservation and Protection Act, SMI inducts frontline employees and contractors on socio-cultural sensitivity. The induction includes an orientation on legal statutes that deal with respect for indigenous rights, inclusive of cultural properties.
Community grievances
The Tampakan Projects Grievance Mechanism is used to resolve complaints, issues and concerns of stakeholders who are directly and indirectly affected by SMIs operations. The guidelines aim to ensure that the company is able to effectively communicate and consult persons and institutions interested or impacted by the companys activities, as well as ensure compliance with any laws, regulations and standards by means of an effective management system including data and document control.
case study
The SMI public consultation process

SMI is committed to extensive, open and transparent public consultation with all Project stakeholders. As part of the Environmental and Social Impact Assessment (ESIA) for the proposed Tampakan Mine, SMI conducted a series of stakeholder engagement activities that have centered on prescoping meetings with key stakeholders and four public scoping meetings. The pre- and public scoping meetings, held in late 2009 were guided by the following objectives: opportunity to provide feedback. This process also allowed SMI to address any concerns or issues they raised. A total of 94 stakeholder groups, with approximately 2,863 individuals, were engaged in a series of 43 small, private consultation meetings from September to December 2009. Four public scoping meetings were held between 17 and 20 November 2009. Here the company also explained the future benefits of the Tampakan Project. A total of 579 stakeholder issues, concerns, queries, and statements were gathered during the public and private scoping meetings. These have been categorized into the following categories:
Inform stakeholders of the key components of the proposed mine. Formally announce the start of the ESIA process to stakeholders and the community. Inform stakeholders of the ESIA process and the associated stakeholder engagement process. Elicit and record stakeholder issues and concerns in relation to the Project.
Environment and Social Impact Issues Land Access and Resettlement Free and Prior Informed Consent Project benefits Corporate
While there is no statutory requirement to undertake pre-scoping stakeholder meetings, SMI chose to include this level of consultation to ensure that key stakeholders were wellinformed about the Project and provided with an
The above categories will be considered, in conjunction with the on-going specialist studies, and incorporated into the Project designs and plans where appropriate.
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case study Heritage Surveys
using a culturally sensitive engagement approach

As part of its commitment to undertake extensive, open and transparent consultation, SMI established Heritage Surveys as an operational procedure to facilitate land access. Implemented through a group of officers and staff from SMIs departments, a Heritage Survey team coordinates with local barangay officials prior to a visit and engages duly designated barangay representatives for the actual survey. On-site, technical and cultural surveys are undertaken simultaneously. While the environmental team accomplishes an inventory of environmentally relevant data including indigenous plant and animal life that may be affected by company activities, a safety team conducts ocular inspection of possible hazards and risks, while the technical groups assess previously identified exploration and operation areas. Teams from the Corporate-Community Sustainability Department (CCSD) undertake cultural heritage survey to determine the presence or absence of a culturally sensitive site; and conduct land valuation that includes computation of compensation for land access and for affected and/or damaged crops. The calculations of compensation for affected crops were standardized, and now serve as the basis for negotiations with affected households for securing their consent to land access. SMI was able to conduct heritage surveys in 133 drill sites in 2009. Cultural heritage surveys led to the discovery of six burial sites, which brought the total number of surveyed cultural heritage sites to 33. Implementation of Heritage Surveys coupled with mechanisms that promote culturally sensitive engagement contributed to a decline in community grievances in 2009, with 16 grievances recorded.
The environment
In line with the Tampakan Projects strategic objectives, we strive for industry leadership in environmental performance. The environmental management system in place is aligned with our business Principles and SD Standards. We routinely assess our performance against these systems and standards.
Environmental incidents
In 2009, the Tampakan Project was fully compliant with regulatory requirements and did not receive any environmental fines. There were no category 3 (significant), category 4 (serious), nor category 5 (disastrous) incidents within the year. Illegal small-scale mining in the project site resulted in sedimentation and the detection of mercury in the surface water in barangay Pulabato in 2008. In 2009, this activity continued to pose a health hazard to downstream communities and negative impact on the environment. SMI continues to collaborate with the LGu and relevant authorities to develop effective solutions to address illegal mining, including slash and burn activities, in the Project area. SMI provides counterpart support for livelihood and alternative legal sources of income or through an LGuled awareness campaign on the health and environmental hazards of these activities.
Water management
A detailed surface water model is being developed in current feasibility studies. Modeling and catchment analysis work is currently being reviewed to include risks associated with production demand, downstream baseline flows against various criteria including that of one-in-1,000-year flood events. This work continued in 2009 as part of the feasibility and Environmental and Social Impact Assessment (ESIA) programs. The water management plan will be developed in the context of both climate change and water stress and factor in the demands of the local population and environment. In 2009, nine sites for surface water monitoring and six sites for surface water biological monitoring were added to capture data for catchments that may be impacted by the future mine. The new monitoring sites brought the total number of surface water monitoring sites to 67 and surface water
biological monitoring sites to 29. Streamflow monitoring continues at 12 stream gauging stations. One Automatic Weather Station (AWS) was installed in barangay Kimlawis in Kiblawan, Davao del Sur. The Kimlawis AWS brought to six the number of AWSs established since 2007. Likewise, an evaporation pan was installed at the Tacub AWS in addition to the existing evaporation pan at the base Camp. Rainfall monitoring continues at 12 rain gauges. The Regional Observation Well project which will involve the installation of observation wells at 14 pre-determined sites commenced in December 2009. The first site was completed with the construction of two observation wells at barangay Liberty in Tampakan Municipality. Four geotechnical holes drilled at Malalag in Davao del Sur Province, in relation to the preliminary studies for the Port and Power Facilities, were converted to groundwater observation wells.
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In partnership with the university of Southeastern Philippines (uSEP) in Davao City and through SMIs marine consultant, Hydrobiology Environmental Services based in Western Australia, the Lake buluan Limnology Studies commenced with the quarterly monitoring of the physical, chemical and biological properties of Lake buluan. However, the fourth quarter monitoring scheduled in December 2009 was postponed due to access restrictions. More intensive baseline monitoring activities were undertaken in Malalag bay and Sarangani bay, which involved monthly profiling, habitat assessment and mapping. The Downstream Water user Survey, which involved a detailed mapping of surface water and groundwater users of the Projects downstream communities, commenced in November 2009 as part of the ESIA technical studies.
Biodiversity
As reported in SR 2008, the biodiversity and Land Management Plan for the Tampakan Project will be developed in 2010 as part of the ESIA technical studies. The flora and fauna surveys for the mines ESIA were completed in the last quarter of 2009. Results of the said surveys will be used in the development of the biodiversity and Land Management Plan. The Tampakan Project, under the Financial and Technical Assistance Agreement, has a total land area of 23,571 hectares. In 2009, around 14 hectares of land were disturbed during drilling operations and eight hectares were already rehabilitated and will continue to be monitored until returned to their original, pre-drilling condition.
Climate change
Xstrata recognizes the environmental, social and economic threat posed by climate change and the need for coordinated, global action to reduce greenhouse gas emissions to address these risks. Our approach to climate change at the Tampakan Project comprises:
reducing direct greenhouse gas emissions (GHG) from our operations, primarily through improving the efficiency of on-site fossil fuel use; reducing carbon emissions attributable to the electricity we purchase by improving the energy efficiency of our operations and investigating using renewable energy sources;
SMI Environment Policy

At SMI we are committed to the highest standards of environmental performance, community cooperation and principles of sustainable development. This commitment will be achieved through a demonstrated understanding of environmental accountabilities, leadership in all levels of management, and the effective implementation of an Environmental Management System at the Tampakan Project that is aligned to our business Principles and management standards. We will ensure that we:
Identify, assess and responsibly manage risks to employees, non-employees, the environment and the communities in which we operate. Set objectives and targets for continual improvement in environmental performance, allocate appropriate resources to achieve those targets and routinely report our results. Consult with relevant stakeholders in the development of our Environmental Management System. Train and develop our people to competently manage, and be accountable for, environmental performance in their areas of responsibility. Efficiently use natural resources and implement measures to prevent pollution and reduce waste.
Contribute to the conservation of biodiversity through our management of biodiversity- related risks and utilizing opportunities to avoid, minimize, and mitigate impact where feasible. Plan, construct, operate, and close the Tampakan Project in a manner that contributes to sustainable development. Determine the causes of environmental incidents and implement actions to prevent recurrence in a timely manner. Continually improve our environmental performance by routinely assessing the effectiveness of, and our compliance with, our Environmental Management System. Reduce our direct and indirect greenhouse gas emissions and work with other organizations, governments and groups to address climate change.
Meet and, where practicable, exceed applicable laws, regulations and standards. Work constructively with national and local authorities, communities, nongovernmental organizations and other stakeholders.
The environment
improving our understanding of the potential physical and weatherrelated risks of climate change on our operations and logistics networks and incorporating adaptation of these into longer-term planning; improve operational energy efficiency, to reduce GHGs associated with transport and business travel; and investigate opportunities to switch to low-carbon energy sources.
Solid waste management

In 2009, the Tampakan Project generated a total of 4.07 metric tons of recyclable domestic waste and 13.46 tons of scrap metal. In addition, 27.49 kL of waste oil was also collected. The waste oil was treated by Holcim Philippines, Inc., SMIs third party waste contractor, for an environmentallysound treatment. The waste oil and used tires are used as alternative fuel resources during cement manufacturing.
Hydrocarbon management: Impermeable bunds constructed in major fuel storage areas, emergency spill response training rolled out to key personnel Rehabilitation of terminated drill sites rehabilitated drill sites are being monitored to ensure areas are stable and rehabilitation success criteria is met prior to final relinquishment and signoff.
In 2009, the following technical studies were also undertaken as part of the ESIA:
Air emissions
The Tampakan Project produces minor quantities of ozone-depleting substances, nitrous oxides and sulfur oxides consistent with normal diesel burning equipment. These are primarily associated with vehicle usage, generator set operation and drilling activities.
Environmental management system

The Tampakan Projects major initiatives in 2009 to mitigate significant environmental impacts associated with the Project include:
Soils mapping and land use assessment within the Project area Terrestrial and aquatic flora and fauna surveys Noise assessment and modeling Air quality assessment and modeling Water resources assessment Visual amenity surveys Rehabilitation and closure planning Economics assessment Social impact assessment and consultation
Ongoing development and implementation of the site Environmental Management System (EMS) consistent with ISO14001 Implementation of controlled documentation including that of procedures and XCu SD standards progressively rolled out across the site Quarterly internal environmental audits undertaken with corrective action items monitored Identification of high environmental risks for the Project
Xstrata recognizes the environmental, social and economic threat posed by climate change and the need for coordinated, global action to reduce greenhouse gas emissions to address these risks.
baseline studies and impact assessment are ongoing. The ESIA will be delivered to the DENR in the fourth quarter of 2010.
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The Environment
case study Forest inventory and flora and fauna study
Ensuring environmental best practices before and after operations

In 2009, SMI received the Presidential Mineral Industry Environment Award, the highest award for outstanding environmental practices awarded to a minerals development company in the Philippines. SMI was also the second runner-up in the best Mining Forest Program for exploration category. Throughout the year, SMI completed baseline studies on soil, flora and fauna, visual, and noise. SMI also carried out forest inventory activities, with the objective of collecting quality forest growth and development data, to better understand the sustainability of the forest systems and minimize adverse environmental impacts to these systems. The tree inventory and flora and fauna studies include data gathering on biological diversity. Indigenous plants and animal life which may be affected by the Projects operations are studied and cultivated at the Liberty Core Farm Nursery. These species will eventually be reintegrated into their respective ecosystems once the mine has ceased operation. The nursery at the Liberty Core Farm serves as a resource center for the companys reforestation programs, distributing 130,000 seedlings of various species in 2009 with a survival rate reaching 90%. Around 50 varieties of indigenous trees have been propagated, the most in any part of the country. The seedlings will supply, in part, the requirements for a buffer zone that will be established around the mine site. The buffer zone is designed to protect the surrounding ecosystems, reduce carbon released into the atmosphere, mitigate noise and air pollution, ensure water quality is maintained, and prevent soil erosion. Actual plans for the buffer zone are being developed alongside the implementation of continuous forest inventory, objectives for which include:
Prioritizing planting areas for the next two years and areas that will be maintained over the life of the mine Allocating costs for the preferred planting systems, data for which will be collected from current planting activities and integrated into a financial model for the buffer area establishment
In addition, SMI has been exploring the socio-economic benefits of the reforestation program such as generation of employment and livelihood opportunities through site preparation and planting, as well as other benefits that may be derived from the procurement and provision of seedlings and other planting materials.
Seedlings released per municipality since 2005
41
case study Lake buluan Study
A critical milestone
In 2009, SMI commissioned a detailed study of Lake buluan, a major milestone critical to both the region and the Tampakan Project, as no similar study has ever been undertaken on the lake. Lake buluan is the third largest lake in Mindanao, it straddles the boundaries of President Quirino and Lutayan in Sultan Kudarat and buluan in Maguindanao. It is a fresh water lake with an estimated surface area of 61.3 square kilometers and an average depth of 2.0 meters with maximum depth of 5.8 meters. The Lake buluan study utilizes international best practices and scientifically sound methods and covers the hydrology and limnology of the lake. Objectives of the study include:
investigate the current status and drivers of the Lake; understand the controls on lake processes and health to determine management measures; generate a baseline dataset that provides a comprehensive reference point for future management; provide information suitable for potential impact assessment for future natural resource development and industry in the Lake buluan catchment; and provide an information resource tool which can be used as a basis for engaging the local community and other stakeholders.
The study is being carried out as a result of a Memorandum of understanding between the Provincial Government of Sultan Kudarat, the university of Southeastern Philippines, and Hydrobiology WA Pty Ltd of Australia. It is scheduled for completion in the first quarter of 2010. Results of the study will be presented to various stakeholder groups for their information and review. The study forms the basis of an assessment for the Projects ESIA. Additionally, SMI will develop a plan to ensure that Lake buluan, as a vital environmental and livelihood resource, is left unharmed with the operation of the Tampakan Project.
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Summary of key sustainability data

Economic contribution in USD
Employee salaries and benefits Royalties and taxes Corporate Social Involvement Public Infrastructure
2007
2.4 million 2.3 million 915,943 3 million
2008
4.1 million 4 million 1.4 million 5.6 million
2009
4 million 4.4 million 1.7 million 2.5 million
Governance and ethics

Total value of financial and in-kind contributions to political parties 0 0 0
Our people
Total workforce Permanent employees Full-time contractors Total employees covered by collective agreements Percentage of employees hired from local area Fatalities Total Recordable Injury Frequency Rate (TRIFR) Lost Time Injury Frequency Rate (LTIFR) Disabling Injury Severity Rate (DISR) Health and safety prosecutions Health and safety fines Occupational Illnesses Average hours of training per employee 127 125 729 0 98% 0 0 4.20 1.05 3.10 0 0 17.87 209 170 846 0 81% 0 1.24 0.41 2.90 0 0 0 36.75 252 211 1,065 0 98% 0 0 0 0 0 0 0 21.07 16* 0
Our community
Community complaints Community resettlement 24 0 32* 0
Our environment
Domestic Waste Recycled (metric tons) Scrap metal (metric tons) Waste oil (kL) Electricity (kWh) Total water use (ML) Raw groundwater Raw surface water Total recycling and reuse of water (ML) Land disturbed (hectares) Land rehabilitated (hectares) Category 3 incidents Category 4 incidents Category 5 incidents Prosecutions Fines in uSD 5.41 5.26 11.40 305,328 18.8 6 13 N/A 9.50 8.55 0 0 0 0 600 5.49 26.60 18.82 187,465 42.2 9.8 32.4 N/A 2.29 3.10 0 0 0 0 0 0 0 0 0 0 4.07 13.46 27.49 121,483 74.29 36.9 35.4 N/A 13.80 8.15
* Number of complaints filed to go through the Projects grievance management process
GRI index
The table below indicates where to locate information relating to GRI G3 indicators and principles in this report or other publications.
Reporting Indicator Level Location
Vision & Strategy 1.1 1.2 Organisational Profile 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 Report Parameters 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 n/a n/a n/a Introduction, inside front cover GM Project Report, page 4 Introduction, inside front cover Contact Details, back cover Our Approach to Sustainable Development, page 12 Introduction, inside front cover Introduction, inside front cover Introduction, page 1 GRI Content Index, page 44 Our Approach to Sustainable Development, page 12 n/a n/a Introduction, inside front cover Introduction, inside front cover Introduction, inside front cover Introduction, inside front cover Introduction, inside front cover Introduction, inside front cover GM Project Report, page 4 Our Approach to Sustainable Development, page 12 EC7 EC8 EC9 MM1 MM2 EGM Project Development Message, page 2 GM Project Report, page 4

EC1 EC2 EC3 EC4 EC5 EC6 n/a n/a n/a Our operations and economic contributions, page 20 Not reported Our operations and economic contributions, page 20 Workplace and our people, page 26 Our operations and economic contributions, page 20 Not reported Our operations and economic contributions, page 20 Not reported

LA6 LA7 LA8 LA9 LA10 LA11 LA12 LA13 LA14 MM12 MM13 n/a n/a The workplace and our people, page 26 The workplace and our people, page 26 The workplace and our people, page 26 Not reported The workplace and our people, page 26 The workplace and our people, page 26 Not reported The workplace and our people, page 26 The workplace and our people, page 26
Environmental Performance Indicators EN1 EN2 EN3 EN4 EN5 EN6 EN7 EN8 EN9 EN10 EN11 EN12 EN13 EN14 EN15 EN16 EN17 EN18 EN19 EN20 EN21 EN22 EN23 EN24 EN25 EN26 EN27 EN28 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a The Environment, page 38 Not reported The Environment, page 38 The Environment, page 38 The Environment, page 38 The Environment, page 38 Not reported The Environment, page 38 The Environment, page 38 The Environment, page 38 The Environment, page 38 The Environment, page 38 The Environment, page 38 The Environment, page 27 The Environment, page 27 The Environment, page 27 The Environment, page 27 SO7 SO8 MM7 MM8 MM9 MM10 MM11 n/a n/a n/a HR5 HR6 HR7 HR8 HR9 n/a HR1 HR2 HR3 HR4
Social Performance Indicators - Human Rights Refer to Xplc 2009 Sustainability Report Governance & Management Systems, page 16 Governance & Management Systems, page 16 Governance & Management Systems, page 16 The workplace and our people, page 26 Governance & Management Systems, page 16 Governance & Management Systems, page 16 Governance & Management Systems, page 16
Social Performance Indicators - Society SO1 SO2 S03 S04 SO5 SO6 n/a Sustainable communities, page 32 Governance & Management Systems, page 16 Governance & Management Systems, page 16 Governance & Management Systems, page 16 Governance & Management Systems, page 16 Sustainable communities, page 32 Our Approach to Sustainable Development, page 12 Sustainable communities, page 32 Sustainable communities, page 32
Governance, Commitments and Engagement 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 Our Approach to Sustainable Development, page 12 Governance & Management Systems, page 16 Governance & Management Systems, page 16 Our Approach to Sustainable Development, page 12 Refer to Xplc 2007 Sustainability Report Our Approach to Sustainable Development, page 12 Sustainable communities, page 32 Sustainable communities, page 32 Sustainable communities, page 32 Sustainable communities, page 32 Refer to Xplc 2009 Sustainability Report Governance & Management Systems, page 16
EN29 EN30 MM3 MM4 MM5 MM6
Social Performance Indicators - Product Responsibility PR1 PR2 PR3 PR4 PR5 PR6 PR7 PR8 PR9 n/a n/a n/a n/a n/a n/a n/a n/a n/a
Social Performance Indicators - Labor Practices and Decent Work LA1 LA2 LA3 LA4 LA5 n/a The workplace and our people, page 26 The workplace and our people, page 26 The workplace and our people, page 26 The workplace and our people, page 26
Economic Performance Indicators
fully reported
partially reported
not reported
n/a = not applicable
44 TAMPAKAN PROJECT
Glossary
Ancestral lands Refers to all lands exclusively and actually possessed, occupied or utilized by indigenous cultural communities by themselves or through their ancestors in accordance with their customs and traditions and, as such, may be defined and delineated by law. Barangay Also known by its former name, the barrio, is the smallest local government unit in the Philippines and is the native Filipino term for a village, district or ward. Municipalities and cities are composed of barangays. Baseline study The analysis of current situation to identify the starting points for a program or project. Biodiversity An abbreviation of biological diversity and refers to the variability among living organisms from all sources, including land-based and aquatic ecosystems, and the ecosystems of which they are part. Business Principles Xstratas Statement of business Principles sets out the ethical framework for the way we work globally. Category 3: Significant Environmental Incident An incident that has caused moderate, reversible environmental impact with short-term effect, requiring moderate remediation. Category 4: Serious Environmental Incident An incident that has caused serious environmental impact, with medium-term effect, requiring significant remediation. Category 5: Disastrous Environmental Incident An incident that has caused disastrous environmental impact, with long-term effect, requiring major remediation. Certificate of Ancestral Domain Claim or CADC Declares and certifies the claim of each indigenous cultural community over a corresponding territory earlier identified and delineated as ancestral domain. Certificate of Ancestral Domain Title or CADT A certificate of title that is issued by the office of the National Commission on Indigenous Peoples (NCIP). It completes the peoples legal claim to a territory. Commodity business Xstratas activities are structured into global commodity businesses organized along commodity lines. Community complaints and inquiries Any issue raised by a member of the community relating to the operation in question, whether resolved or not. This can relate to an inquiry or other incident or noncompliance. CSI Corporate Social Involvement. Department of Environment and Natural Resources or DENR The primary government agency responsible for the conservation, management, development, and proper use of the countrys environment and natural resources. Department of Labor and Employment or DOLE The primary government agency mandated to formulate policies, implement programs and services in relation to labor and employment. It is also responsible for promoting gainful employment opportunities, developing human resources, protecting workers and promoting their welfare and maintaining industrial peace. Department of Social Welfare and Development or DSWD The primary government agency that provides assistance to local government units, non-government organizations, other national government agencies, peoples organizations, and other members of civil society in effectively implementing programs, projects and services that will alleviate poverty and empower disadvantaged individuals, families and communities toward an improved quality of life. DIFR Disabling Injury Frequency Rate, or (number of disabling injuries X 1,000,000) / working hours where Disabling injuries = LTI + RWI. DISR Disabling Injury Severity Rate, or (number of days lost X 1,000,000) / working hours. EIA Environmental Impact Assessment. EIS Environmental Impact Study. EMS Environmental Management System. ESIA Environmental and Social Impact Assessment. Extractive Industries Transparency Initiative or EITI Aims to increase transparency in transactions between governments and companies in extractive industries. Fatality A death resulting from an occupational injury or illness. Free Prior and Informed Consent or FPIC It recognizes indigenous peoples inherent and prior rights to their lands and resources and respects their legitimate authority to require that third parties enter into an equal and respectful relationship with them, based on the principle of informed consent. Global Compact The uN Global Compact is a voluntary corporate responsibility initiative to advance ten universal principles in the areas of human rights, labor, the environment and anti-corruption. GRI Global Reporting Initiative develops and disseminates globally applicable Sustainability Reporting Guidelines to assist corporations in reporting on the economic, environmental, and social performance of their operations. Indophil Resources NL, IRN or Indophil An Australian publicly-listed company incorporated in 1996, to acquire, explore for and develop gold and copper-gold opportunities in Southeast Asia. HSEC Health, Safety, Environment and Community. HSEC Assurance Program An independent audit program that assesses the systems and performance of Xstratas sites and commodity businesses against Xstratas HSEC Policy and Management Standards. HSEC Committee Xstratas HSEC committee is a committee of the board and the primary HSEC governance structure. HSEC Management Standards A set of 17 standards which set out corporate performance expectations for each operation and against which sites and commodity businesses are independently audited through the Xstrata HSEC Assurance Program. ICMM International Council on Mining and Metals. IUCN The International union for the Conservation of Nature and Natural Resources, also known as the World Conservation union. kL Kiloliter (1 kL = 1,000 liters). Land disturbed Land disturbed by operational activities. Land rehabilitated Land disturbed by operational activities and then reshaped and re-vegetated. LTI Lost Time Injury is an occupational injury or illness that results in days away from work. LTIFR Lost Time Injury Frequency Rate = LTI x 1,000,000/hours worked. Materiality Disclosing all information of significant concern to stakeholders for assessing our economic, environmental, and social performance. Megaliter (ML) 1 megaliter = 1,000,000 liters or 1,000 kiloliters. Mines and Geosciences Bureau or MGB The primary government bureau directly in charge of the administration and disposition of the countrys mineral lands and mineral resources. National Commission on Indigenous People or NCIP The primary government agency in the Philippines that formulates and implements policies, plans and programs for the recognition, promotion and protection of the rights and well-being of Indigenous Peoples and the recognition of their ancestral domains and their rights thereto. NGOs Non-Governmental Organizations. Occupational illness Any abnormal condition or disorder, other than one resulting from an occupational injury, caused by exposure to factors associated with employment. PMSEA Philippine Mine Safety and Environment Association. PPE Personal Protective Equipment. Recycled water Water that has been used at least once in a process within the operation or at another operation within the organization; that would otherwise be part of a waste stream; and if not re-used, would require the input of raw water. Rights-based approach to development A conceptual framework for the process of human development that integrates the norms, standards and principles of the international human rights system into the plans, policies and processes of development. RWI Restricted Work Injury Social Involvement Plan or SIP A plan produced by each commodity business unit of Xstrata, which sets out their engagement with local communities, and details the range of initiatives to be undertaken and the resources, financial and other, dedicated to this area of their business. Sustainable Development or SD Defined in the brundtland Report as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Technical Education and Skills Development Authority or TESDA The government agency in the Philippines tasked to manage and supervise technical education and skills development of the countrys human resources. TESDA formulates staff and skills plans, sets appropriate skills standards and tests, coordinates and monitors staff policies and programs. TRI Total recordable injuries is a measure that includes all injuries other than first aid, i.e. Lost time injuries (including fatalities); Restricted work injuries; and Medical treatment injuries. TRIFR Total recordable injury frequency rate = (LTI + RWI + MTI) x 1,000,000/hours worked. Western Mining Corporation or WMC Was one of Australias largest mining and metal corporations and one of the worlds largest producers of gold, copper, nickel, alumina, talc and uranium. Waste water discharged Total volume of effluent discharged to surface water for irrigation, third parties for treatment, and rivers or ocean.
Tampakan yakal St., corner Talisay St., Tampakan, South Cotabato 9507 Tel : +6383 227 1040 Fax : +6383 227 1045 General Santos City JPM bldg., bula-Lagao Road, General Santos City 9500 Tel : +6383 552 8407 Fax : +6383 552 8405 Manila Sagittarius Mines Inc., 12F LKG Tower, 6801 Ayala Avenue, Makati City Tel : +632 856 3023 Fax : +632 856 3032
www.smi.com.ph

Tampakan Project SD Report

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Tampakan Project

Sustainability Report 2009

About Xstrata plc

About Xstrata Copper

Xstrata Copper Tampakan Project

Manila Catanduanes Mindoro Masbate Samar Ley te Palawan Negros Cebu

MINDANAO Zamboanga Davao

SuSTAINAbILIT y REPORT 2009

Executive General Managers message

Peter Forrestal Executive General Manager Project Evaluation

SuSTAINAbILIT y REPORT 2009

General Managers message

Mark Williams General Manager Tampakan Project

SuSTAINAbILIT y REPORT 2009

Targets and Scorecard

Targets and Scorecard

n/a = not applicable

SuSTAINAbILIT y REPORT 2009

Targets and Scorecard

Effective delivery of rights-based approach in the conduct of the FPIC process

Effective implementation of involuntary resettlement plan

Facilitated access to 89 drill sites

Effective delivery of rights-based approach in the conduct of the FPIC process

Targets and Scorecard

Forge partnership with credible organizations

Targets and Scorecard

Scope of this report

Defining report content

The Global Reporting Initiative (GRI)

SuSTAINAbILIT y REPORT 2009

Our approach to sustainable development

Our approach to sustainable development

Xstrata Coppers Definition of Purpose

Our strategic objectives

SMI Sustainable Development Policy

SuSTAINAbILIT y REPORT 2009

Key sustainability challenges

Our approach to sustainable development

Awards for sustainable development

SuSTAINAbILIT y REPORT 2009

Governance and management systems

Governance and management systems

Child and forced labor

Bribery and corruption

SuSTAINAbILIT y REPORT 2009

Governance and management systems

Public policy participation and political contributions

Principal memberships & associations

SuSTAINAbILIT y REPORT 2009

Our operations and economic contribution

Our operations and economic contribution

SuSTAINAbILIT y REPORT 2009

Tampakan Conceptual Mine Layout

SuSTAINAbILIT y REPORT 2009 23

Our operations and economic contribution

Progress in Barangay Kimlawis

SuSTAINAbILIT y REPORT 2009 25

The workplace and our people

The workplace and our people

SMI 2009 Safety Performance Monthly Moving Average