Barrick Gold Corporation - Sustainability - Social & Economic Development

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SOCIAL & ECONOMIC DEVELOPMENT

Our sustainability principles set out a commitment to contribute to the social and economic development of our host countries and communities.

In 2019, we distributed more than $9.3 billion in economic value across 13 countries through payments and remittances to governments, employees and suppliers, and through community investments.

$9.3 billion
Total economic contributions in 2019

$4.4 billion
Over $4.4 billion to local and national vendors

$1.3 billion
In taxes and other payments to governments

$25.5 million
Invested in community development projects

~6%
Our economic contributions to Mali ~6% of GDP

4%
Largest payer of corporate income tax in Dominican Republic, contributing 4% of the country’s total tax revenue

MANAGEMENT APPROACH

Our commitment to social and economic development is set out in our overarching Sustainable Development Policy and our Social Performance Policy. Together, these policies commit us to:

Support socio-economic development as an integral part of our contribution to local communities and host countries, including through the prioritization of local workers and vendors
Be transparent in our relationships with host communities, government authorities, the public and other key stakeholders
Conduct our business with integrity through our absolute opposition to corruption, and through requiring our suppliers to operate ethically and responsibly as a condition of doing business with us

How we create value and deliver social and economic development for our host countries and communities is based on four key pillars: paying our fair share of taxes; prioritizing local hiring; prioritizing local buying; and investing in community-led development initiatives.

The official reopening of the Paiam hospital in the Porgera Valley in Papua New Guinea in 2019. Considered one of its standout sustainability achievements for the year, Barrick helped refurbish the hospital to a high standard, greatly enhancing the quality of healthcare for the people of the Porgera valley.

The taxes, royalties and dividends we pay provide significant income for our host countries and help to fund vital services and infrastructure.

We want to pay the right amount of tax in our countries of operation and believe the taxes we pay reflect our profitability and success as a business. Our approach to tax and tax planning is set out in detail in our Tax Management Policy, which commits us to comply in a responsible manner with the laws and practices of all the countries in which we operate, deal with the authorities openly and with integrity, and not undertake contrived or artificial tax planning. Simply put, our approach is to pay the right amount of tax, in the right place, at the right time, and to transparently report all payments we make.

The jobs we create provide valuable training and employment in regions where opportunities are often scarce.

We recruit wherever possible from the communities nearest our mines. If we are unable to find staff with the appropriate skills or qualifications in the community, we look to the wider region and neighboring provinces and states, before looking to national employees or expatriates. We require all our mines to develop localization plans that identify, create and maximize opportunities for local people to work at the mine. The localization plan at our Pueblo Viejo mine in the Dominican Republic, for example, includes community skills mapping, apprenticeship training and internship opportunities, rotational temporary employment in areas such as grass cutting for unskilled workers from local communities, and encouraging suppliers to employ local workers.

The priority we place on buying goods and services from local communities and host countries leverages our supply chain and multiplies the economic benefits of our presence.

We view our supply chain as an enormous opportunity to achieve a central goal of our sustainability strategy: To contribute to local economic development which is thriving and self-sustaining long after the mine gates have closed.

Our procurement processes prioritize local companies, followed by those from the larger region or host country. We consider host country-based companies to be those with at least 51% equity ownership by a citizen or have at least 80% executive and senior management positions filled by host country nationals. This definition is currently being updated and implemented across our expanded business. In 2019, we procured over $4.4 billion of goods and services, from suppliers based in our host countries.

SUPPLY CHAIN

Strengthening the Chain

While leveraging our supply chain is one of the best opportunities we have to support sustainable development in the regions we operate in, we know that it is critical that our suppliers also follow safe and ethical practices. We have processes in place to make sure our suppliers meet our standards and to identify potential risks. These include:

Precontract due diligence

Before entering into any contract, we undertake due diligence on potential vendors to gain an initial overview and understanding of their business and risk profile. Aspects considered part of a vendor’s risk profile include, financial health, human rights protection, safety and environmental management and history of malpractice. Pre-qualification checks undertaken include: prohibited party, anti-bribery and anti-corruption screening, from an historical and current assessment.

Additional reviews and controls or advanced due diligence procedures are carried out for potential ‘high risk’ suppliers. These include suppliers who fall into the following categories:

Involved in the sale and transport of cyanide or explosives
Where we anticipate a large spend
Based in high-risk jurisdictions
Linked to, referred by or controlled by government officials or agencies

There may from time to time be additional categories to determine the risk potential.

Our standard contracts include clauses that commit vendors to uphold our core sustainability policies such as our Conflict Free Gold, Anti-Bribery and Anti-Corruption, Human Rights policies, and our Code of Business Conduct and Ethics.

On-going monitoring

Throughout the contract life, our site and regional procurement teams work with vendors to identify, mitigate and manage risks. We conduct periodic risk assessments based on a rotating and risk-based schedule. For our largest or high-risk vendors, checks and risk assessments may be undertaken annually, depending on the risk profile.

Building Capacity and Raising Standards

We realize that vendors from our local communities may not immediately meet the standards we expect. Rather than not use these vendors, we see it as an important opportunity to develop local skills, increase capacity, and improve performance. It is a strategy that takes time but ultimately helps to diversify local economies and reduce dependence on the mine.

An example of this in practice is the catering services at the Kibali mine in the DRC. Golden Camp Services (GCS) have provided catering services to Kibali since 2018 and uses local farmers as their principal suppliers of beef, pork, and lamb. In 2019, GCS purchased over $270,000 of products from local farmers. Beyond this, GCS partnered with the Kibali team to train farmers and other local community members in the health and hygiene standards expected by a world-class mine.

In 2019, Barrick funded several local community members who work with GCS to undertake a 10-month training course in the butchery business. This included training on how to process meat into consumer-friendly products such as hamburgers and stroganoff. The course has resulted in many local community businesses achieving professional hygiene certifications, including the requirements of the ISO 22000 International Standard on food safety management.

GCS and Barrick have also worked together to provide the basic infrastructure, including building slaughter slabs — permanently installed constructions which provide a clean environment for the slaughter of livestock.

Our support to GCS and its supply chain is not only important in feeding today’s Kibali workforce. It is laying the foundation for a more robust, highly skilled local economy — one that can offer high-quality services across the region and help build lasting prosperity long after the mine closes.

Other examples include:

In the Dominican Republic: The process plant at our Pueblo Viejo mine in the Dominican Republic requires regular corrosion control painting. During 2020, we intend to work with and train local painters in corrosion control skills, with the aim that over time local businesses can take responsibility for the painting of the plant and similar work.

In Tanzania: At the North Mara mine, our site team is working to develop local ore haulage contractors. This includes providing support and training in areas such as optimal fleet deployment and operational management best practices.

In the Democratic Republic of Congo: We provided funding for a consultant from Congolese construction business Inter Orientale Builders (IOB) to complete a Masters in Engineering for Capital Projects. IOB initially started as a roading and construction contractor during the construction of our Kibali mine. By 2018, they were one of the lead local contractors for the construction of the 10MW Azambi hydropower station at Kibali, a project which was built entirely by Congolese companies. IOB have since won several regional and international contracts.

Barrick views the development of local vendors such as GCS at Kibali, in the DRC, as part of a strategy which helps diversify the local economies and reduces dependence on the mines.

Partnership Building in Tanzania

When we acquired control of the Buzwagi, Bulyanhulu and North Mara mines in Tanzania in September 2019, one of our key priorities was to kick start a strong relationship with the Tanzanian government. At the time of acquisition, a dispute over taxes owed had led to a long impasse between Acacia and the government which resulted in a ban on concentrate exports. This standoff resulted in the destruction of significant value for all stakeholders.

Restoring the relationship with the government and rebuilding operations at our Tanzanian mines will require a lot of work; however, we are optimistic that the progress we have made to date is a strong foundation for a productive partnership. In October 2019, we announced a framework agreement with the government of Tanzania for the resolution of all disputes.

The terms of the agreement include:

A $300 million payment to the Tanzanian government, payable in instalments, to settle all outstanding disputes with Barrick
The lifting of the concentrate export ban
The establishment of a new local operating company, Twiga Minerals, to manage the Bulyanhulu, North Mara and Buzwagi mines
Providing the Tanzanian government with a 16% free-carried shareholding in the mines
An agreement to share future economic benefits on a 50 / 50 basis
The establishment of an Africa-focused international dispute resolution framework

We believe that this agreement heralds the start of a new partnership between our company and the Tanzanian government, so that Tanzania and its people will share fully in the value created by the development of national resources. The framework agreement was signed in 2020, with Twiga Minerals now up and running and the concentrate export ban lifted. The establishment of Twiga, which means giraffe (the national symbol of Tanzania) in Swahili, will give the Tanzanian government full visibility of and participation in operating decisions made by the mines. It represents our new partnership not only in spirit but also in practice.

Tanzania’s Minister for Foreign Affairs Professor Palamagamba (John) Kabudi and Mark Bristow at the launch of Twiga Minerals.

PERFORMANCE

Overall, our total direct economic value distributed in 2019 was $9.3 billion. This includes payments to suppliers as well as wages and benefits to over 43,000 employees and contractors, dividends, taxes and royalties paid, and $25.5 million invested in community development projects across our countries of operation. Our total procurement spend was $5.9 billion. Of this $4.4 billion flowed to national suppliers.

While the dollar value of our investments or number of people employed are lagging indicators, we believe it is nevertheless important to track and transparently report on these figures. Communities and governments invite us into their communities because they rightly expect to see returns on development and we need to be honest about what these returns are. Equally important, if the data shows us that the economic benefits and jobs are not reaching the local community or the country, we know something is wrong and can work to fix it before our license to operate is harmed.

Economic Value Statement

Please note that the basis for preparation and disclosure of this information may differ from methodologies used by Barrick for other purposes, such as our ESTMA report. Some totals may not sum due to rounding.
Includes royalties paid to third-parties, political contributions, compensation payments and payments to local communities as part of land use agreements.
Payments to providers of capital was not calculated as part of the economic value statement in 2018.

Employment

Senior Site Leaders

Purchases

COMMUNITY DEVELOPMENT

We believe that no one knows the needs of local communities better than the communities themselves. That is why at each of our mine sites we aim to establish Community Development Committees (CDCs) with the local community. The role of the CDC is to allocate the community investment budget to those projects and initiatives most needed and desired by the local communities. Each CDC is elected and is made up of a mix of local leaders, community members and representatives from local women’s and youth groups.

While self-directed, the CDC model is underpinned and guided by several core principles. These are:

Priority based budgets: The community investment budget for each mine is informed by community priorities rather than based on mine production levels.
Five investment focus areas: Projects and initiatives approved by any CDC fall within our five focused sustainable development categories: Education; Health; Food; Water; and Local Economic Development.
Self-sustaining: Any project should aim to be sustainable and self-sufficient over the long term. For example, our agricultural college near Loulo-Gounkoto couples agricultural skills training with business development training, and connections to markets. We also encourage microfinance organizations to establish in our communities in sub-Saharan Africa. This provides local people, many of whom are unbanked, with access to growth capital to expand their businesses.
Deliver benefit to operations: Projects should also return some benefit to our mines. For example, investments in anti-malaria programs in the community not only strive to eliminate the scourge of malaria from our host communities in sub-Saharan Africa but also help to reduce worker absenteeism, up to 25% of which is attributable to malaria. In North America, our work to support and improve access to high quality education helps to attract and retain the high caliber workforce needed to run our mines.
Primacy of partnerships: Wherever possible we partner with public and private sector specialists to maximize community development and align with regional and national government development plans. This helps to drive additional investment, add scale to projects and multiply the positive impacts. For example, at our Loulo-Gounkoto mine in Mali we have a long-term partnership with the World Education charity that helps improve teaching standards in the Kayes region. This has helped to transform exam results in the region from some of the lowest nationwide, to some of the best. Similarly, we partner with German development agency GIZ to support the local community agricultural college.

Hilaire Diarra, Head of Environment and Sustainability, Africa and Middle East and Country Manager Tanzania, briefing students at Barrick’s agricultural college near Loulo-Gounkoto, Mali.

Partnering with Government to Restore Access to Health Care in Rural Papua New Guinea

Access to healthcare in the Porgera Valley is limited. Up until 2016, a private hospital provided healthcare facilities for the local community. However, operational issues meant the hospital had to close and the facilities fell into disrepair. This left local residents with no access to healthcare, other than the Porgera mine clinic.

To restore access to healthcare for local residents and to reduce the burden on the mine clinic, we partnered with the Enga Provincial Health Authority and local landowners to restore and reopen Paiam hospital in 2019, the only recognized tertiary level healthcare facility in the Porgera Valley region.

As part of the partnership, we invested more than K3 million ($870,000) to undertake critical maintenance work and upgrades, including the installation of emergency power generators, new water pipes and infrastructure, and solar water heaters on all buildings. Essential equipment was also purchased including sterilizers, x-ray machines, defibrillators and an incubator.

The hospital was successfully reopened in September 2019 and has been admitting and treating approximately 2,000 patients per month since it reopened.

The Paiam hospital in the Porgera Valley in Papua New Guinea was reopened in 2019 with the help of Barrick.

Farms Without Limits: Building the Capacity of Local Farmers in Argentina

San Juan in west-central Argentina, where our Veladero mine is located, has fertile valleys and is home to a number of farmers. To help farmers share in the benefits of our mine, we launched an Agricultural Procurement Plan in 2016 designed to increase opportunities and productivity levels for local producers. The plan is a partnership agreement with local authorities, local producer associations and the San Juan Mining Ministry and Production Ministry. As part of the agreement, we are working with Veladero’s main catering contractor Aramark to help it maximize the purchases it makes from local producers and invest in opportunities to raise skills and capacity for the local farming industry. Our hope is this partnership will not only increase the flow of local food into our mine but also raise the ability of local farmers to compete in the wider regional and national economy.

During 2018 and early 2019, Aramark invested in local agricultural infrastructure for both the Jachal and Iglesia Farming Management Associations, the local communities closest to Veladero. The investment saw the associations provided with four cooling chambers, a loading storehouse and a 200m² greenhouse. This has helped to further increase production and allows produce to be stored longer, reducing food waste and increasing profit for the farmers.

Argentina’s Minister of Mining Alberto Hensel speaks at the opening of a new greenhouse and cold storage facility in San Juan.

Members of the Jachal and Iglesia Farming Management Associations, in San Juan province, Argentina.

Taking Action on Malaria and HIV

In the remote parts of sub-Saharan Africa where we work, diseases such as malaria and HIV/AIDS often hamper the social and economic development of our host communities. They can also negatively impact our operations. For example, malaria accounts for almost 25% of all worker absences at our mines in Africa. Taking steps to reduce and eliminate them from our communities therefore is not only an important part of our community health strategy, it also delivers benefits to the business.

Our African operations have focused HIV and malaria prevention programs in place. The anti-malaria program includes distributing insecticide impregnated mosquito nets, spraying and larvaciding on site and within a 10 km radius around each of our mines, providing insect repellent to night shift workers and prophylactic medication during the transmission season. In total, we spent $690,000 on anti-malaria initiatives in 2019. We monitor the success of the program by tracking our malaria incident rate and have a target to reduce malaria incidence by 5% year on year. In 2019, our malaria incidence rate was 19.23%, which is a slight increase on 2018.

To protect our communities and workers from HIV/AIDS we partner with expert NGOs at each of our mines in Africa. The aim of these partnerships is to raise community awareness and provide access to voluntary counselling and testing (VCT). We aim to increase the number of VCTs conducted each year. As part of our HIV/AIDS program in 2019, we distributed 570,000 free condoms and our clinics provided more than 16,000 free VCTs.

During 2020, we plan to expand these programs to our new assets in Tanzania.

Spraying for mosquitoes.

Barrick’s anti-malaria campaign program includes distributing insecticide impregnated mosquito nets, spraying and larviciding.

OUR PERFORMANCE

Six of our sites now have a functioning CDC in place. Notably this includes North Mara in Tanzania, where we only took full operational control in September 2019 and it came with a legacy of challenging community relations. Other sites to establish CDCs in 2019 include Lumwana in Zambia. We expect the remaining operations to establish CDCs during 2020.

During 2019, we invested over $25.5 million in community development projects at our mines. We track our community development spend to make sure that the communities closest to our operations receive their rightful share of the benefits for our presence in their community and the development of their national resource.

Community Development Initiatives ($ millions)

Quality Education

School desks made by local carpenters in Papua New Guinea as part of a community development initiative further Barrick’s other sustainability objective of providing quality education in the areas it operates.

COMMUNITY ENGAGEMENT

Our communities rightly expect the opportunity to contribute and participate in decisions that may affect them. We therefore work to establish transparent and participatory engagement mechanisms which help deliver timely information regarding mining operations, and provide access to company representatives who listen to, and act on, community concerns. Effective engagement also provides a forum for the resolution of community grievances or to discuss the risks and opportunities linked to our mines in a fair and open manner.

Management Approach

We believe the most effective community engagement is managed and delivered at the local level. We set out our commitment to developing strong community relations and positive engagement in our Social Performance Policy. We require our sites to:

Engage with host communities through means that are culturally appropriate and transparent, and duly consider the circumstances of vulnerable persons and groups
Establish management systems for community relations in line with international and industry best practice that help us identify and manage significant social risks and opportunities
Establish context-appropriate engagement structures and systems to involve stakeholders in decisions that affect them, making our development initiatives more effective and sustainable over the long term

Effective community engagement is vital for Barrick’s continued license to operate.

Community Engagement Activities

Some of our community engagement activities include:

Annual risk, impact and opportunity assessments to provide mine management with enough information to design, develop and implement community engagement strategies.
Dedicated site level resources, responsible for on the ground day to day implementation of our community engagement work. The number of resources varies based on the local context. Smaller sites may have just a single officer, while the community team at Porgera in Papua New Guinea has more than 140 members.
Annual stakeholder engagement plans to map local stakeholders, including vulnerable groups. Our mines aim to consult and inform our local stakeholders in a timely manner about activities and operational matters that may impact them.
Monitoring and reporting of our performance to both internal and external stakeholders. Internal channels through which community engagement is discussed includes daily briefings onsite with department heads, weekly calls with regional leads and the Group Sustainability Executive, a weekly Executive Committee meeting and the quarterly E&S Oversight Committee meetings. We also conduct annual stakeholder perception surveys at some of our Latin America sites, to help us better understand how our stakeholders view us and any emerging issues. Externally we report performance through channels such as community meetings and our annual Sustainability Report.
Grievance mechanisms to enable communities to formally lodge grievances. We track the number of community grievances lodged on a monthly and quarterly basis. This helps us to understand and address any community concerns before they escalate. Our goal is to respond to all grievances lodged within 30 days of receipt, and to resolve all grievances through our grievance mechanism.

Young ambassadors from each of the San Juan municipalities pay a visit to Veladero to learn about mining, the main economic activity in Argentina’s San Juan province. The ambassadors were selected at the National Sun Fest.

Performance

The success of a grievance mechanism — or of a site’s relations with local communities — should not be measured by the number of grievances received. A lack of complaints may indicate a mechanism or company that is not trusted nor deemed unapproachable by local stakeholders. Conversely, large numbers of grievances can indicate open lines of communication and robust community engagement activities.

However, by tracking the number and type of grievances, we can identify issues that are important to communities before they become social risks.

During 2019 we received a total of 802 grievances across the group, including at our new assets. This is a significant reduction on the number of grievances received in 2018. Notably, during 2019 we resolved a number of longstanding legacy grievances at the Porgera Joint Venture. During 2020 we will continue to work to resolve the remaining legacy grievances.

Grievances Received and Closed

Types of Grievances Lodged (%)

RESETTLEMENT

Resettling households is one of the most sensitive challenges a mining company can face, and if not well planned and carefully managed, resettlement can damage relationships with the local community, harm our social license to operate, or result in regulatory action from government.

As set out in our Social Performance Policy, our approach is to avoid, minimize or mitigate the need for resettlement. These documents are guided by the IFC Performance Standards, and compel us to:

Work to make sure that the affected parties are fully engaged in, and help to shape, the resettlement process
Improve or at least restore the relocated persons’ standard of living

The starting point for any resettlement is a Public Participation Process (PPP). The PPP encourages the inclusion of any and all opinions and grievances into the compensation process. The results of the PPP are used for the development and implementation of a Resettlement Action Plan (RAP), which must be agreed to prior to any resettlement occurring. No significant resettlements took place at our mines in 2019.

Children return home after school in Kokiza, a resettled village built near Kibali, DRC.

Artisanal and Small-Scale Mining

Artisanal and small-scale mining (ASM) is a complex and widespread challenge faced across the gold mining industry. It is estimated that ASM provides livelihoods for up to 100 million people worldwide. However, it is often unregulated and associated with negative health, safety, human rights and environmental impacts.

ASM activity was present on or near the following sites in 2019: Pierina (Peru), Loulo-Gounkoto (Mali), Tongon (Côte d’Ivoire), Kibali (DRC), Porgera (Papua New Guinea), and Bulyanhulu, Buzwagi and North Mara (Tanzania). Our approach to ASM within our permits is based on the principle of ‘no-conflicts no-invasions’ and aligns with ICMM guidance. As far as is practicable, we work in partnership with our host communities, governments and specialist NGOs to develop mutually beneficial long-term strategies to reduce or eliminate ASM. A key part of this approach includes working to develop alternate livelihood opportunities for ASM communities.

Our Approach

Health & Safety

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Sustainability Report 2019 (PDF)

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