Investment in communities

Constructive and transparent engagement with local stakeholders is a critical prerequisite for the sustainability of our operations. As a result, we spend considerable time and resources on the establishment and maintenance of constructive, consultative and cooperative stakeholder relations. This includes regular and proactive engagement with:

• Local government officials
• Elected community leaders
• Informal community groups
• Non-Governmental Organisations (NGOs)
• Environmental focus groups
• Organised labour
• Local enterprises

Our engagement with each of these groups is guided by our Communities and Indigenous People Policy, the requirements of our Social and Labour Plans, as well as the AA 1000 Stakeholder Engagement Standard. This requires the establishment of regular and formalised engagement platforms with all relevant stakeholders.

These are used to address relevant and material issues as identified both by Gold Fields and by the groups being engaged.

In Australia, relationships with local communities mainly focus on the rights of indigenous people under the Native Title Act 1993. These include issues around native title, land access and cultural heritage.

Our operations in Ghana enjoy a particularly strong and well-established community engagement framework. This plays an important role in the effective and constructive management of our community relationships and the development of a stable operating environment in what could otherwise be a challenging socio-economic context. It is based on five different levels of engagement, as described on.

In addition, our mines in Ghana hold regular mine tours for a range of stakeholders, and operate an ‘open door’ policy with respect to members of the community who wish to raise issues of concern. Collectively, these structures have proven particularly effective in ensuring that we continue to enjoy positive relations in the area.

In Peru, we engage with the communities within our direct area of influence through systematic meetings held under a formalised community engagement framework. These follow a pre-established schedule aligned with the priorities of each of the communities involved. This continuous channel of dialogue has been essential to build trust and enables us to address community concerns in a proactive manner. We also work through the “Mesa de Dialogo y Concertacion de Hualgayoc”, a community forum led by the Mayor of Hualgayoc, to discuss development projects for the region. It is attended by over 40 representatives from local communities, as well as local authorities and NGOs.

In addition to our ‘routine’ community engagement processes, all of our Environmental Impact Assessments (EIAs) include a significant public engagement element throughout the Group. This includes processes to inform stakeholders about relevant aspects of our projects, as well as likely impacts and mitigation measures. It also requires us to respond to all written comments and to address the issues raised. During C2010, this process was particularly relevant in relation to the development of our:

• Combined Tailings Storage Facility in West Wits, South Africa
• Advanced stage Chucapaca project in Peru
• Advanced stage Far South East project in the Philippines

We believe that it is in our clear business interest to promote local socio-economic development in the communities in which we operate. As noted earlier in the report, our primary means of doing so is through our economic contributions to our host countries. We also have extensive socio-economic development programmes that directly address some of the specific challenges faced by our local communities.

Australia

We invest in community development projects around the St Ives and Agnew mines through the Gold Fields Australia Foundation. The six organisations currently receiving the most significant beneficiaries of the Foundation include:

• Starlight Children’s Foundation, which supports children living with illness or injury (A$50,000)
• Royal Flying Doctor Service (A$50,000)
• The Leinster Primary School (A$36,000)
• Australian Red Cross (A$30,000)
• Grass Roots Holiday Haven (A$25,000)
• Indigenous scholarships (A$24,750)

Ghana

During C2010, Gold Fields invested US$2.3 million in socio-economic development projects at the Damang and Tarkwa mines. Our socio-economic development programmes are funded through the Gold Fields Ghana Foundation, to which we contribute US$1 per ounce of gold produced in Ghana and 0.5% of our pre-tax profits. Relevant projects entered into during the year included:

• The provision of 35 new, four-year community scholarships and 124 new bursaries, in addition to existing educational sponsorship programmes aimed at secondary schools and tertiary institutions linked to the mining industry
• Initiation of our Small Town Water Supply programme, through which we are constructing pilot boreholes and overhead tanks in communities around our Tarkwa mine. This programme, to which we have allocated a total of US$260,000, is aimed at improving water quality and security of supply
• A range of innovative agricultural programmes to promote local entrepreneurship and best agricultural practice to boost local incomes
• Construction of a clinic at Damang to serve local and satellite communities
• Ongoing support of the Nana Amoakwa model school, including financial support to increase teachers’ salaries by 50%, to attract the highest quality teachers and improve educational standards

Peru

The remote location of our Cerro Corona mine means local communities are particularly reliant on Gold Fields for socio-economic development, as well as basic infrastructure, such as roads and telecommunications. During C2010, we invested US$4.48 million in support of related projects.

A key example of this spending can be found in our milk supply chain project. This focuses on increasing cattle resilience through veterinary treatment and artificial insemination, the maintenance of a successful ‘cattle bank’ for husbandry and improvements to pastures.

This has resulted in an almost threefold increase in the yield of pasture land, a near doubling of pasture land area and a significant increase in milk production amongst local farmers. The final phase of the programme in C2010 saw the construction of a US$400,000 dairy plant, which has the capacity to process 4,000 liters of milk per day.

In addition, we completed the first phase of a major rural electrification programme in C2010, covering our direct area of influence and the town of Hualgayoc. In late C2010, we initiated a US$900,000 project to develop a secondary power transmission network that will provide electricity to local households.

Other programmes carried out at Cerro Corona include:

• A textile craft training programme for local people
• Provision of nutrition to local children
• Paving of the road between Yanacocha and Hualgayoc

At Chucapaca we have carried out construction of community centres at Antajahua and Maycunaca in the Oyo Oyo community

These measures, as well as our extensive stakeholder engagement programme, have helped establish strong relations with our local communities. This has been – and will continue to be – important given the Peruvian political context, where particular focus is placed on the social, economic and environmental impacts of mining.

“As mining companies move into regions ever more remote, they find themselves cast in the role of providers of such basic community services as water, electricity, health and education”
Deloitte, Tracking the Trends 2011: The Top 10 Issues Mining Companies Will Face in the Coming Year

South Africa

Our socio-economic development programmes in South Africa are primarily implemented by our mines through the statutory Social and Labour Plan (SLP) framework. Under South Africa’s Mineral and Petroleum Resources Development Act 2002, applicants must submit an SLP prior to the granting of mining rights.

We also implement a range of additional initiatives that go beyond the requirements of our SLPs.

SLP spend

Each SLP includes both a Skills Development budget for employees, local community members and labour sending areas, as well as a Local Economic Development (LED) budget. We implement LED initiatives at all of our South African mines – and in major labour sending areas – in line with plans agreed with the Department of Mineral Resources. Our SLPs are also closely aligned with local municipalities’ integrated development plans – as well as relevant and material issues identified during our community engagement activities. During C2010, our SLP spending amounted to a total of R75.6 million (US$10.3 million).

Notable near-mine projects supported by Gold Fields include, amongst others:

• The Alien Vegetation Project at our Kloof-Driefontein Complex (KDC), which aims to create jobs and conserve local biodiversity through the clearing of alien vegetation and the production of charcoal. The project’s 45 participants have produced 500 tonnes of timber since it started in November 2010
• The Living Gold rose farm on the West Rand, which has provided training for over 650 people in the skills of growing, harvesting, sorting and packaging world class quality roses for export. The project has already produced over 60 million roses.
• It is accredited by the Global Gap and as a result is audited for performance with regards to both rose production, and environmental and social issues
• A sewing project involving 22 local women, which has received LED funding for equipment and training. The project produces a range of safety attire and equipment. The sewing project is based in the Eden Village Community and Spiritual Centre, which was established to serve as a hub for independent community businesses
• The Futyana bakery, which is based at our Driefontein mine and is run by an ex-Gold Fields employee. The bakery, which employs 22 local people, supplies the mine with more than 2,000 loaves of bread every working day. Gold Fields supplied loan finance to the enterprise, as well as indefinite rent-free accommodation in an old hostel building

Plans have also been approved for a major LED project at South Deep, including a five-year, R1.5 million (US$204,918) project to provide funding to local farmers in need of ‘seed capital’.

Following the issuing of the South Deep mining licence in May 2010, we established a joint task team to undertake further engagement with external stakeholders, including local municipalities and communities.

We also consult with our employees, organised labour and the Department of Labour in order to ensure that our SLP programmes help benefit workers who are exiting Gold Fields. These include, for example, the Paragon ‘Stitchwise’ initiative, which provides employment to injured ex-employees through the production of safety apparel. Our internal portable skills training programmes and Adult Basic Education and Training programmes also help employees generate alternative livelihoods after leaving Gold Fields. Our labour sending area projects, on which we directly spent a total of R3.1 million (US$423,497) in C2010, are particularly pertinent to exiting employees. They include rural development programmes in the Eastern Cape and KwaZulu-Natal provinces – home to approximately 31% of Gold Fields staff in South Africa.

Our projects in the labour sending areas are coordinated via TEBA Development – a well established South African organisation with a long history of working with the mining industry. For example, our Abalimi Phambili farming project provides over 1,800 emerging local farmers in more than 150 villages with training, mentorship, technical support and advice, access to funding and links to viable markets. This includes 45 former Gold Fields employees who have been medically boarded due to workplace injuries.

Our farming project has also created 175 jobs, improved crop yields and is supplying an increasing number of local stores and supermarkets. We also support an associated livestock development project, which has reached more than 7,800 farmers. The project has contributed to a significant increase in livestock numbers, as well as a reduction in livestock fatality rates and an increase in crop yields. It is based on a successful pilot programme first initiated by Gold Fields in Ghana.

In addition, TEBA Development coordinates Gold Fields funded programmes in labour sending areas outside of South Africa, in the wider Southern African Development Community area.

Additional socio-economic development spend

Additional projects that benefit our employees, their family members and local communities outside of the SLP framework include:

• A five-year, R550 million (US$75.1 million) housing programme
• Regular investment in schools that serve local communities and the children of our employees
• A three-year, R28 million (US$3.8 million) sponsorship programme of Wits University and the University of Johannesburg
• About R175 million (US$23.9 million) on training in South Africa through the Gold Fields Business and Leadership Academy, on-mine training and bursaries

In addition, all our operations in South Africa contribute towards the Business Trust and the National Business Initiative, both of which support economic development across the country.

	http://www.teba.co.za/
	http://www.btrust.org.za/
	http://www.nbi.org.za/

One of the most common and pressing challenges facing the diverse communities in which we operate is unemployment. We place particular emphasis on the use of local labour, where it is operationally and commercially viable.

The nature of our operations, which are increasingly mechanised and often require highly specialised skills that are not always locally available, means the number of positions we can offer local community members is sometimes limited. As a result, we also promote alternative income generation opportunities and skills development to help establish viable futures for local community members and their families.

Local employment

As well as providing important benefits to local communities, the employment and development of people around our mines also helps bolster our own skills pipeline. This ensures that we have ready access to necessary skills and competencies, and are increasingly able to employ local citizens. This has become even more important in light of global competition for mining specialists, as well as our commitment to ensure that our workforce reflects the demographics of our host countries.

Our efforts in this regard are most apparent in Ghana and Peru. Cerro Corona, for example, is already outperforming a commitment we made to employ 150 people from local communities during its operational phase. The mine employs (both directly and through contractors) 523 people drawn from its neighbouring communities. It is estimated that around 20% of the local economically active population in the mine’s direct area of influence works at the mine either as Gold Fields employees or contractors.

In addition, C2010 saw the full implementation of a programme to promote local employment at our Tarkwa mine in Ghana. Under this programme, which was first implemented in 2009, vacancies for Gold Fields employees or contractors are communicated to the Community Affairs department. These are then cross-checked against a database containing details of the skills and qualifications of local people. If viable candidates are available, they will be shortlisted and interviewed on a fair and transparent basis by the mine’s Employment Committee, which is chaired by a local chief nominated by his peers. Other initiatives at Tarkwa include:

• A programme to draw potential technical employees from our local communities and sponsor them through the Tarkwa Technical Institute before commencing employment as engineers and geologists. In C2010, 10 local community members went through this process
• An Employees’ Children’s Programme, through which we provide US$1,000 individual bursaries for 60 pupils a year to pursue studies and training that will benefit our operations
• A targeted programme to fill unskilled positions from local communities. In C2010, approximately 20 people gained employment via this route

We have requested our contractors to adopt a similar approach to local employment – multiplying the impact of our efforts. In Ghana, for example, all contractors sourcing unskilled labour are required to do so through our Community Affairs department.

Local capacity building

In addition to our employment of local people, we also place emphasis on the training and development of local community members. This is in order to improve our local skills base and to promote broader socioeconomic development.

At Cerro Corona, for example, we offer in-house operator and electro-mechanical skills training to 60 members of the local community each year through our human resources department. This programme is aimed at improving their employability within the broader Peruvian mining sector. During C2010, we also started construction of two educational facilities.

In C2010, Gold Fields had a total of 106 university bursaries, 546 technical learnerships and 74 postgraduates in training in South Africa. Although it will take time for participants in our external education and training programme to fully develop, the programme is establishing a solid pipeline of highly skilled HDSAs who will help us transform our future leadership and provide a base from which the wider South African mining industry can draw skills.

In addition, we entered into new sponsorship agreements with the mining faculties of the University of the Witwatersrand (Wits) and the University of Johannesburg (UJ), with a combined value of R26 million (US$4 million) for three years.

Supporting South African engineering through sponsorship of the Universities of Johannesburg and Witwatersrand In early C2010, Gold Fields formally committed to a R26 million (US$3.6 million), three-year sponsorship deal with the mining engineering faculties of the University of Johannesburg (UJ) and the University of the Witwatersrand (Wits). UJ and Wits will receive a combined one-off capital injection of R8 million (US$1.1 million) and a combined R6 million (US$819,672) a year for three years. This is in addition to traditional funding that Gold Fields has channelled for decades to UJ, Wits and the University of Pretoria. The new sponsorship aims to strengthen the alliance between Gold Fields and the universities to promote the study of mining engineering and technology. These are core disciplines that will not only sustain Gold Fields own operations, but also the South African mining industry as a whole. The money will be used to pay for the construction of new mining design laboratories, the upgrading of laboratory equipment and other facilities, as well as the salaries of senior lecturers. Gold Fields will be given naming rights to the mining laboratories and associated infrastructure. At present, the number of engineers graduating from South Africa’s universities is not sufficient to maintain a healthy skills pipeline. Indeed, in 2009 only around 90 mining engineering students graduated in South Africa. This compares to an intake of around 200 students four years earlier. There are currently only four universities in South Africa that offer mining engineering qualifications. As a result, building capacity at both UJ and Wits will play a pivotal role in addressing the skills crisis facing the national industry South Africa’s mining engineers are also in great demand across the globe and skills flight is further compounding this shortage. A March 2010 survey by the Landelahni Business Leaders recruitment firm found that only around 15% of South Africa’s mining engineers remain in the national industry for a long-term career. This compares to 75% in the US and 80% in Australia. Gold Fields is adopting a leadership position in proactively addressing the South African skills gap. This will give the company a competitive advantage in terms of accessing skilled mining engineers, and will greatly enhance the sustainability of Gold Fields operations in South Africa. http://www.uj.ac.za/ http://web.wits.ac.za http://www.landelahni.co.za “The industry is currently facing a skills gap crisis which is proving to be a serious challenge for the mining industry. We are pleased to be partnering with Wits University and the University of Johannesburg to help ensure that we create a pipeline of qualified engineers who can benefit Gold Fields and the industry in general” Nick Holland, Chief Executive Officer of Gold Fields

It is Gold Fields policy to make use, where possible, of local suppliers in all of the regions in which we operate. In addition, we provide assistance to potential and active suppliers to help them improve their business and management processes. As with our socio-economic development programmes, local procurement plays a key role in helping us secure and maintain our social licence to operate.

The often remote location of many of our operations, where there may be little other infrastructure or economic activity, means local procurement can have a particularly positive impact in terms of our community relations. It also offers significant long term operational advantages with respect to the development of reliable local industries that will enhance our longterm security and flexibility of supply.

In Ghana, we are playing a leading role within the Chamber of Mines and in partnership with the Mineral Commission of Ghana, to drive the import substitution agenda. This aims to increase the local content of the materials and goods that we use – and so ensure more value is added locally. We are also engaging closely with the government in order to help inform the development of commercially viable future policy on local procurement. Local procurement offers particular advantages in Ghana, due to the often substantial transport costs involved in importation.

For example, four years ago we entered into a strategic partnership with Tema Steel Limited, a Ghanaian company that manufactures steel milling balls. We worked collaboratively with Tema to improve production quality and expand its operations to a level where it was a viable supplier – both for our own operations and other large mining companies. This support helped Tema cope with the global downturn, whilst also ensuring security of supply for our own operations.

Other notable procurement partnerships include a US$28 million contract for the construction of our Tarkwa TSF3 tailings dam, which was awarded to Ghanaian company, Engineers & Planners, in July 2010. We have also diversified our fuel supply to include a Ghanaian provider (p69).

In Peru, we and other companies are legally required to give priority to local suppliers, provided they meet the necessary standards. We currently spend approximately 15% of our South America Region procurement budget on suppliers in the vicinity of our Cerro Corona mine. This includes the provision of heavy equipment, light transport and general services. These contracts – as well as our proactive commercial support of local business during the construction phase of the mine – have played a key role in the development of commercially viable medium-sized businesses in the area.

In South Africa, local procurement is an important component of our SLPs. In light of this, and our broader transformation commitment , it is our policy to make use of HDSAowned companies where possible.

During C2010, we spent a total of R2.6 billion (US$355 million), or 41% of our total procurement budget for the South Africa Region, with such suppliers.

Despite our efforts, there are certain latent issues that limit our short-term ability to take local procurement as far as we would wish. In many cases, local suppliers are currently unable to meet all of our required operational and contractual standards. Where we can, we work with such suppliers to help them address relevant issues around, for example, product specifications so they can achieve preferred supplier status. In Peru, our managers meet with local suppliers every two months and offer ongoing training to help them reach our procurement standards.

Wherever possible, we engage with local people through traditional decision-making structures and processes. We do so before any substantive exploration activities take place and ensure that information is presented in an accessible form.

The management of relations with indigenous people is particularly pertinent in Australia, which has a well defined legal framework governing cultural heritage and other related issues. This includes the Commonwealth Native Title Act, as well as the Aboriginal Heritage Act 1972, under which it is an offence to damage or destroy indigenous heritage.

During C2010, we engaged with a number of indigenous groups near our Agnew mine in order to establish the exact extent of indigenous sites under the Act in five of our concession areas – and to gain approval to drill in the Crusader South area. This included consultation with the following groups:

• Ngalia
• Wutha
• Koara (Evans)
• Koara (Hogarth)
• Wanmulla
• Tjupan (Elliot-Scgehi)
• Tjupan (Harris)1

Our engagement is based on an innovative risk-based ethnographical and archaeological programme to identify relevant heritage sites. It includes comprehensive community consultations, predictive modelling and site identification surveys. The programme goes beyond the conventional assessment of registered claims of Native Title and is conducted by our own in-house experts.

1 The Wongatha are also consulted regarding the southern part of the Agnew tenement

If culturally sensitive sites are identified, they must be registered with the Department of Indigenous Affairs and cannot be drilled on without formal permission from the minister. In C2010, we took this process to its final stage for the Crusader South area, but ultimately decided not to drill in the area in the short-term .

At our St Ives mine, we continued dialogue with the Nagdju and Widji Native Title Claimants to secure ongoing access to mine development areas. In addition, we have signed heritage agreements with the Ngadju Native Title Claimants over a number of exploration leases and are currently finalising a new heritage agreement covering exploration leases with Widji.

In Canada, our exploration team carries out early and ongoing consultation with relevant First Nation communities when operating in their traditional territories. In addition, we conduct archaeological investigations before disturbing the land to ensure we respect sites of cultural significance.

Where appropriate, we employ First Nation members as environmental monitors. By doing so, we deliver transferable skills to First Nation youths, ensure transparency around our exploration activities and offer additional assurance that we are not impacting on sensitive sites.

In C2010, there were no incidents involving the violation of indigenous peoples’ rights by Gold Fields. The only areas in which our operations take place in or adjacent to indigenous peoples’ territories are at our Agnew and St Ives mines in Australia. There have been no significant disputes relating to land use, customary rights of local communities and indigenous peoples in C2010.

Gold Fields has formal agreements in place with the following indigenous communities:

• Wutha (renewal in negotiation)
• Wanmulla
• Ngalia (renewal in negotiation)

Resettlement

Our use of the open pit mining method, as well as the presence of numerous farming communities around our mines, makes community resettlement particularly pertinent in Ghana. A small number of resettlements took place in C2010, including:

• The relocation of one household as part of the Volta Region Authority Relocation Project, which saw the construction of a new power sub-station at Tarkwa
• Resettlement of around 50 people from the Kofi Sah village at the Damang mine, due to expansion of the mine areas
• Resettlement of more than 90 people from the Rex pit area at the Damang mine, due to expansion of the mine areas

In each case, resettled people were provided with adequate compensation and/or housing and, where relevant, with the means to generate alternative livelihoods. Under our Livelihood Restoration Programme, which started two years ago, resettled people can purchase agricultural land using their compensation money – while Gold Fields will also provide them with the means to successfully cultivate it. This includes the provision of palm seedlings, as well as livestock.

This programme is integrated with our broader agricultural development projects in the area. It was put in place well in advance of a draft amendment to the local Minerals and Mining Act, which contains livelihood restoration requirements. It also helps ensure the productive use of compensation payments.

Land impacts

As with resettlement, our surface operations in Ghana will often impact upon local land use and crops. This is a key risk that requires careful management. It includes differentiation between the majority of cases that are legitimate, and a number of ‘speculative’ cases whereby planting and/or settlement takes place in the expectation of future compensation.

Community members are able to contact our Community Relations teams at any time to raise concerns and register a formal complaint. All such complaints, which can be made anonymously, are recorded, investigated, tracked and resolved as appropriate.

In addition, a formal system is in place to engage with farmers who are likely to be affected by our activities. This includes the identification of stakeholders, including farmers, district assembly members and NGOs, as well as the provision of information around relevant activities and their likely impacts. We then form – along with local community members – multi-stakeholder committees aimed at addressing negotiation procedures and compensation packages. During this process, the committee meets with farmer representatives, traditional local authorities, representatives of the local district assembly and the Environmental Protection Agency.

Once packages are signed off, project activities can progress with the assurance that all major compensation issues have already been addressed. This process also ensures that all related procedures, including grievance procedures, have been pre-defined and enjoy broad community consensus.

This engagement procedure was used in two key cases at Damang. Plans to establish a new tailings storage facility, for example, were predicted to impact up to 220 ha of land and affect more than 400 farmers. Compensation payments were successfully settled with all those affected. Likewise, the development of the Huni waste dump affected more than 70 farmers, all of whom were successfully engaged without incident. The procedure was also used twice in C2010 at Tarkwa.

Where new mining activities are likely to displace illegal miners, proactive efforts are made to avoid boycotts and conflicts. This includes programmes to inform illegal miners of the status of the land, as well as the schedule of work. This allows illegal miners the opportunity to plan alternative arrangements and move out of the area. Representatives from the district assembly, as well as the police, military and immigration authorities are also involved in the process. Although there were no significant movements of illegal miners in C2010, our established engagement process has proven to be reliable and successful in previous years.

Informal artisanal mining represents an ongoing challenge for the gold mining sector in a range of countries. Issues that have the potential to impact on the reputation of gold mining, as well as companies operations, include:

• A sometimes close relationship with illegal mining activities
• Poor health and safety standards
• Pollution as a result of improper environmental practices
• Incidents of child labour

Where artisanal mining takes place on our concessions illegally, we will address this using our relevant security procedures. Otherwise, we are committed to playing a positive role in improving the working conditions, environmental performance and socio-economic conditions of those engaged in artisanal gold mining. This includes ongoing engagement with the International Council on Mining and Metals on issues surrounding artisanal mining.

In the forthcoming year, we plan to investigate potential ways in which we can collaborate with artisanal miners in the vicinity of our mines – as well as other interested stakeholders – to our mutual advantage. This is a particular issue in Ghana, where a significant amount of artisanal mining takes place in the vicinity of our Damang and Tarkwa mines.