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Unmatched supply chain sustainability and social responsibility

At the core of our business are the extraordinary people who focus on safe production while helping to improve the sustainability of areas near our operations. This means we operate a business that upholds and respects human rights while working with our stakeholders on the fundamental environmental, social and economic aspects of our sustainability programs.

The nature of our business impacts the environment and communities surrounding our operations. We mitigate impacts to the extent practicable through advanced control and remediation measures. We develop infrastructure, support health, safety and education efforts, and provide local employment and business development opportunities. The products we produce are critical for sustainability and higher standards of living.

To supply essential metals to current and future generations, we are guided by our stated business objectives, principles and policies, and we work continuously to improve our sustainable development programs. Throughout, we discuss the daily progress our workforce is making on key issues, including those emerging, which affect our company and our stakeholders.


We have noted the continuous improvement and increasing maturity in our sustainability-focused, global risk management processes, particularly over the last eight years of third-party assurance. While we will continue to implement the ICMM Sustainable Development Framework, we are focusing our sustainability efforts on two key areas that provide a solid foundation for achieving our long-term business objectives.

First, we must maintain acceptance to operate through shared value at the local level in order to reinvest in our existing properties, plus new ventures, thereby increasing the production of metals needed for a healthy and prosperous world.

We also understand that our sustainability performance is critical to meeting society’s, including our customers’, responsible sourcing objectives so that we can place our products into the global marketplace today and into the future.

We will maintain our efforts to continuously improve all elements of our sustainability performance and are eato engage with stakeholders on this continued journey.

Business Ethics We are committed to the highest level of ethical and legal conduct. The Freeport-McMoRan Principles of Business Conduct (PBC) are a commitment to integrity and define the expected behavior of all employees and our board. We conduct comprehensive training on our PBC, including annual certification of management-level employees (approximately 97 percent were trained in 2016). This process consisted of computer-based training, as well as a signed certification that the employee understands the PBC and is not aware of cases of non-compliance. Beginning in 2017, the PBC training is provided annually to all employees.

Governance The Freeport-McMoRan Board of Directors (board) as a whole is responsible for risk oversight, with reviews of certain areas being conducted by the relevant board committees that regularly report to the full board. In its risk oversight role, the board reviews, evaluates and discusses with members of management whether the risk management processes designed and implemented by management are adequate in identifying, assessing, managing and mitigating material risks.

The board believes that full and open communication between senior management and the board is essential to effective risk oversight. Our non-executive chairman regularly meets with and discusses with our chief executive officer a variety of matters including business strategies, opportunities, key challenges and risks facing the company, as well as management’s risk mitigation strategies. Senior management attends all regularly scheduled board meetings where they conduct presentations on various strategic matters involving our operations and are available to address any questions or concerns raised by the board on risk management-related or any other matters. The board oversees the strategic direction of the company, and in doing so, considers the potential rewards and risks of our business opportunities and challenges, and monitors the development and management of risks that impact our strategic goals.

The board has five standing committees: Audit, Compensation, Nominating and Corporate Governance, Corporate Responsibility, and Executive, each of which is composed entirely of independent directors. The Corporate Responsibility Committee assists the board in fulfilling its oversight responsibilities, including with respect to the company’s 1) environmental policy and implementation programs; 2) human rights policy and practices; 3) safety and health policies and programs; 4) community health programs and related public health matters; and 5) community policy and practices, governmental and stakeholder relations, and social investment and sustainable development programs.

During 2016, the Corporate Responsibility Committee received various reports and considered numerous items with a particular focus on safety, which included reviewing the root causes of fatal accidents, corrective actions implemented to prevent accidents in the future, and improvement in our safety procedures and practices. In addition, the Corporate Responsibility Committee reviewed community medical and public health services, including our malaria and other disease prevention programs in Indonesia and the DRC, our global social expenditures, community engagement efforts, political activity and spending practices, the safety reporting process at our operations, our risk management and sustainability programs, our human rights program, our product stewardship program, and our tailings stewardship program. The Corporate Responsibility Committee reports to our board, which provides oversight on all matters.

Sustainable Development Leadership Team The company’s Sustainable Development Leadership Team considers both imminent matters and emerging trends while providing strategic guidance for our programs. The team is sponsored by our Executive Vice President and Chief Administrative Officer, and is led by our Vice President of Environmental Services and Sustainable Development. Our Chief Operating Officer, business unit presidents, as well as Vice President-level or senior staff from the safety, supply chain, security, human resources, sales, legal/compliance, and land and water functions comprise the team.

During 2016, the team reviewed and addressed key issues and projects including:

  • Emerging global regulations and business-to-business initiatives related to product stewardship, including market access and sustainability performance
    in the value chain
  • Roll-out plan and training program for our updated Principles of Business Conduct: “Strength in Values”
  • Work plans for future Human Rights Impact Assessments, including at Cerro Verde in 2017
  • New ICMM position statements on Water Stewardship and the Prevention of Catastrophic Failure of Tailings Storage Facilities
  • Current and future contributions from operations to the UN Sustainable Development Goals
  • Key observations related to independent assurance of our sustainability programs, including implementation of the ICMM Sustainable Development Framework
  • Product control and custody procedures at TFM in the DRC
  • Results of engagements with the socially responsible investment community and other financial stakeholders
  • Company practice of reporting government payments, including country-level participation in the Extractive Industries Transparency Initiative (EITI)
  • Key themes and disclosures in our WTSD reporting

Audits and Assessments To ensure implementation of our policy commitments and objectives, we utilize a combination of audit and assessment programs along with an annual program for site-level independent assurance of our sustainability framework that encompasses commitments of the ICMM Sustainable Development Framework. The health and safety management systems and environmental management systems of our operations obtain independent certification to Occupational Health and Safety Assessment Series (OHSAS) 18001 and International Organization for Standardization (ISO) 14001, respectively. These systems include corrective and preventive action tracking for internal and external audit findings. Our Tailings Stewardship Program includes inspections and reviews all active and inactive tailings storage facilities. Engineers of Record also inspect our operating TSFs on a quarterly basis. In addition to our own audit programs, customers and financial institutions periodically request to conduct sustainability-focused audits or assessments at certain facilities. Our operations are also routinely inspected by regulatory agencies of host governments.

Project Development Sustainability Review Our Project Development Sustainability Review process allows us to integrate sustainability considerations into mine development or expansion projects. The review is designed to help multi-disciplinary project teams identify risks, unintended consequences, trade-offs and opportunities so they may be adequately addressed early and continuously through each stage of project development. Project Development Sustainability Reviews may occur at the scoping, prefeasibility, feasibility and/or engineering/construction stages of projects, and are also applicable to exploration projects.

This review complements our operational Sustainable Development Risk Register procedure for existing operations. Since its inception in 2011, we have implemented reviews for 23 projects, including one during 2016. Key areas of focus identified at scoping stages include access to water, energy and materials, potential impacts to hydrology, air quality, human rights, community receptivity to the project, economic impacts, and land acquisition and resettlement if necessary.

Sustainable Development Risk Register The The Freeport-McMoRan Sustainable Development framework is implemented based on operation-specific factors and influences, including regional context, type of operation and social setting. Essential to this framework is the Sustainable Development Risk Register process, which prioritizes risks that could have the potential for negative consequences to our business and our stakeholders as it relates to areas including health and safety, respect for human rights, the environment, and community stability and economic impacts. The Sustainable Development Department and senior corporate multi-disciplinary personnel coordinate with operations to ensure prioritization processes are consistent with corporate procedures and provide guidance to ensure alignment of priorities and mitigation plans.

Sustainable Development Risk Register The Freeport-McMoRan Sustainable Development framework is designed for alignment with the ICMM Sustainable Development Framework and implemented based on site-specific factors and influences over the short to long term. Our framework has evolved over the past five years and operations vary in maturity of its implementation. Essential to our framework is the Sustainable Development Risk Register process, which prioritizes environmental, social and economic challenges and opportunities based on our views of potential impacts to our business and the importance of these topics to stakeholders. As part of this process, local management teams utilize a matrix with eight consequence categories, including safety, community, environmental, reputational and production impacts.

Product Stewardship Environmental and social performance of mining operations, as well as of the metals we produce, continues to be of interest to many stakeholders within the value chain, from customers to regulators. We view this trend as an opportunity to engage on the vital importance of our products for social progress as well as on our programs that guide responsible operating practices.

Maintaining market access for our products allows us to remain a viable business entity. Members of our Product Stewardship team engage both downstream customers and international governmental agencies on operational and product-specific sustainability issues. We believe that proactive engagement on product stewardship matters can help reduce sustainability-related risks and ultimately enable us to continue to deliver positive contributions to society.

Our Product Stewardship team is led by our Vice President of Environmental Services and Sustainable Development and is coordinated with our global product sales and legal teams with support from multiple technical experts.

During 2016, the team addressed issues including:

  • Business-to-business due diligence efforts related to sustainability policies, programs and performance of our operations
  • Input into development of draft Organisation for Economic Co-operation and Development (OECD) Minerals Risk Handbook
  • European Union and European Commission proposals regarding responsible sourcing objectives for minerals
  • Pending and final regulations related to chemicals management in the value chain
  • Analysis and input regarding globally emerging regulations, or policies from international governmental agencies for product labeling requirements
  • Tracking and interfacing on the product stewardship work of trade associations, including the International Copper Association, ICMM,
    Cobalt Development Institute and International Molybdenum Association
  • Emerging nongovernmental sustainability certification, benchmarking and reporting initiatives

For more information on our sustainable development program, click here.