Barrick has an opportunity to contribute significantly to social and economic development in the communities and countries where we operate.
Communities and host governments rightly expect to share in mining’s benefits. When we live up to their expectations, we are partners with host governments and communities in their own development, contributing to a more stable and prosperous society and a more secure license to operate.
We contribute in a number of ways to social and economic development, including through buying and hiring locally, investing in education, helping diversify livelihoods, and paying our fair share of taxes.
Barrick has put in place company-wide systems and standards to help us live up to the expectations our community partners have of us.
Local content refers to the employees and goods and services that come from the local area that are employed and used by a mine site. Managed well, the use of local content increases opportunities for communities and provides multiple economic benefits that stimulate development. Local content can help Barrick by fostering a more stable workforce and supply base, ensure we meet permitting or regulatory requirements, and can help reduce our costs. We therefore purchase local goods and services and employ local people whenever possible.
$1.1 billion in local purchases in 2015
The Local Procurement and Contracting Standard requires community relations and supply chain teams to develop local and regional suppliers and increase their access to supply opportunities. By integrating local suppliers into broader procurement systems, not only do we have the opportunity to help diversify local economies, but we also have the potential to lower costs for the goods and services we use at our mines.
Barrick also requires sites to develop plans to guide local employment efforts over the life of the mine. At these sites, the human resources teams develop and lead the local employment plan, supported by community relations teams. In general, these plans integrate recruitment and retention of local employees into the broader human resources approach. This includes an assessment of the skills and capabilities available in the local community, the development of recruitment and retention programs targeted specifically at local communities, guidance on helping address skills shortages, and the creation of a culturally appropriate work environment.
To support the efforts of our procurement and human resources teams, Barrick has put in place a local content framework. The framework acts as a guide by outlining the steps to develop local employment and local procurement programs and reflect best international practice.
Local Content over the Life of Mine
Successful construction and operations are driven by the site planning for local employment and procurement as early as possible in the study phase. In the pre-feasibility stage, the site has enough information to develop a general plan and forecast for local employment and procurement. For example, our Alturas project – even though it is in very early stages – has already developed a local employment plan. Capacity building and training are an important focus in the study phase in order to take advantage of the significant opportunities that come during construction. Continued development and retention is a major focus during operations so that local employees and suppliers can take best advantage of long-term opportunities.
At some sites, Barrick Human Resources teams have identified a significant potential savings in employee costs if management positions are filled by locals and nationals as opposed to expatriates. As a result, they have introduced a succession planning strategy that focuses on local employee job shadowing and training alongside expatriate managers.
Community development programs, when undertaken in collaboration with our contractors, communities, governments and civil society, lay the necessary foundation for strong and strategic partnerships — that is, partnerships that can both generate long-term, sustainable benefits for local communities and address social risks.
$37.8 million spent on Community Investments in 2015
965 scholarships provided in 2015
Barrick’s community development programs are designed to fulfil social obligations; mitigate social impacts and social risks; and support community priorities. Our community development activities are also planned with closure in mind.
We take a partnership approach to our community investments. This means knowing what matters to our partners — including communities, governments, NGOs and others — and reflecting those interests in whatever we do. It also means clearly defining roles, responsibilities and resources, and spelling these out in Memoranda of Understanding (MoUs). Below are several examples of recent partnerships:
The tax and royalty payments Barrick makes to national and sub-national governments are a significant source of revenue. At Barrick, we see these payments not as costs but as important investments in the countries where we operate. This revenue can help governments build infrastructure and fund social programs, driving both their economic growth and social development, as well as contributing to our license to operate.
We publicly report on these payments as part of our commitment to transparency and as a signatory to the Extractive Industries Transparency Initiative (EITI).
As we have operations and projects in nine countries, we are accordingly subject to various tax regimes. The taxes we pay can be affected by a number of factors on an annual basis, including debt repayment, changes in tax rates, mining allowances, foreign currency exchange rates and changes in the tax laws.
Indirect economic impacts are the result of the interactions we have with stakeholders and are an important part of our economic contribution. While difficult to precisely quantify, they include the impacts of our employees, our contractors and the employees of our supplier industries spending their wages and salaries. They also reflect economic impacts associated with improvements in community health and livelihoods (e.g. access to clean water, medical support and education facilities). A 2012 study by the World Gold Council in Peru found that a multiplier of 1.9 to 3.8 could be factored into mining’s contribution to a country’s gross domestic product. The same study identified a 1.9 employment multiplier. This means that every job we create at one of our Peruvian mines, for example, contributes to an additional 1.9 jobs in Peru.
Our vision is the generation of wealth through responsible mining — wealth for our owners, our people, and the countries and communities with which we partner.
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