Anglo American Annual Report 2012

OPERATING AND FINANCIAL REVIEW STRATEGY IN ACTIONSTRATEGIC ELEMENT: Operating safely, sustainably and responsibly2012 Global social investmentexpenditureTotal: $154 mCommunity development 43%Education and training 21%Health and welfare 11%Environment 5%Sports, arts, culture and heritage 5%Water and sanitation 2%Incorporating:Disaster and emergency relief 1%Institutional capacity development 1%Employee matched giving 1%Other 10%2012 Global social investmentexpenditure by regionTotal: $154 mSouth Africa 62%Rest of Africa 1%United Kingdom 1%Americas 33%Other 3%Our local procurement policy is nowembedded across the Group and alloperations have made encouragingprogress in developing localprocurement strategies. In 2012,expenditure on suppliers based in thecommunities close to our operationswas $1.5 billion (2011: $1.1 billion).In 2012, we hosted a conferencefor our leading on-site suppliers inSouth Africa and agreed a numberof initiatives to improve the welfare ofour contractor employees and theirfamilies. A number of commitmentswere made by both parties during theconference, including a requirementthat all employees on our operations inSouth Africa would have access tobasic medical care (facilitated byAnglo American where necessary),as well as making Anglo American’shighly regarded tools, initiatives andresources in the areas of communityengagement and communitydevelopment available to contractors.Enterprise developmentEnterprise development is one ofthe most effective means of ensuringthat the benefits for host communitiesas a result of our mining activities willbe sustainable. Since the 1980s, wehave been pioneering approachesto building small businesses in SouthAfrica, and have now extended ourreach firmly into Chile and Brazil.In 2012, we took a more strategicapproach to enterprise developmentthat has involved specifically designingschemes for countries such as Peru,Brazil and Botswana, as well as forparticular focus areas such as housingand low-carbon technologies.Enterprisedevelopmentis one ofthe mosteffective meansof ensuringthat the benefitsfor hostcommunities asa result of ourmining activitieswill besustainable.Infrastructure and localcapacity developmentOur mines are often situated in areasthat are underdeveloped and remote,where the associated infrastructure –such as roads, health facilities andwater – can be used to the advantageof local communities. A particularfocus is addressing South Africa’sacute shortage of affordable housing.Notably, we have entered into apartnership agreement with theDevelopment Bank of Southern Africa(DBSA) to build the capacity of 10 ofour host municipalities. This initiativewill enable local governments todeliver on their basic public serviceobligations; for example, in the fieldsof water and electricity supply,management of local infrastructureprojects and revenue collection. Wehave also briefed the South AfricanChamber of Mines so that othercompanies may replicate this model.Our capacity developmentactivities focus on strengthening theskills, competencies and abilitiesof employees and communitymembers to promote robust,self-sufficient local economieslong after our mines have closed.Corporate social investmentIn 2012, Anglo American’s corporatesocial investment (CSI) spend in localcommunities totalled $154 million(3% of profit before tax), up from$129 million in 2011. We have astandardised reporting processfor all our social investments, withrobust metrics to monitor the levelof social performance. This facilitatesconsistent reporting of outputs, andhelps to identify the most effectiveprojects, delivery methods andpartners, in order to try and maximisethe value that Anglo American andits host communities get from theseinvestments. A fuller analysis of theGroup’s social investment activitiescan be found in the SustainableDevelopment Report 2012.26 Anglo American plc Annual Report 2012