AngloGold Ashanti is committed to upholding the highest levels of corporate governance. Corporate governance is addressed at the Audit and Corporate Governance Committee of the board, which is chaired by a non-executive, independent director.
The company is led by a Board of Directors, comprising 17 members. Of these:
Both the chairman and the deputy chairman are independent. The board’s Audit and Corporate Governance Committee is fully independent and the Remuneration and Nominations committees are majority independent. There are nine board committees that meet on a regular basis. These are the:
A detailed discussion of the functioning of the board and its committees may be found in the Corporate Governance section of the Annual Financial Statements 2006. The Safety, Health and Sustainable Development Committee has, among other issues, responsibility for sustainable development within the company and, in particular, this report.
Current members of the committee are: Bill Nairn (chairman), Bobby Godsell (CEO), James Motlatsi, Neville Nicolau and Simon Thompson. In attendance at each meeting are representatives of the various disciplines: Don Ewigleben (sustainable development), Dr Brian Chicksen and Dr Dave Barnes (health), John McEndoo (safety), Andrew Mackenzie (environment) and Paul Hollesen (community). Each meeting has as its focus one of the specific disciplines. Safety is a standard agenda item.
The company’s ethical performance is guided by AngloGold Ashanti’s values and practised in line with the company’s business principles and our performance against these is reported below.
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AngloGold Ashanti employs in-house legal counsel in the various jurisdictions in which it operates, in North America, South America, Ghana, South Africa, Guinea and Australasia, making up the Global Legal Team. Team members report to the General Counsel (Executive: Law, Safety, Health and Environment) and/or to the operating head of the region in which they are located. They monitor the laws, regulations and standards within their jurisdiction and will report changes in legislation and significant legal issues to the acting General Counsel as well as the head of operations, and provide advice on how best the company can comply with the law.
The following is a summary of all significant legal issues during the year under review. (A significant legal issue is any issue that could result in a liability to the company of US$1.5 million or higher and/or which could have a negative effect on the company’s reputation. The latter is naturally a subjective judgment.)
Two civil cases brought against the company and others in 2000 and 2001 by the Sierra Club and the Mineral Policy Center for allegedly exceeding certain permit water quality standards or lack of permits for certain identified flows (in terms of the federal Clean Water Act) at the CC&V mine were resolved. A trial was held in February 2006. In April 2006 judgment was entered in favour of AngloGold Ashanti and the other named defendants against Sierra Club and the Minerals Policy Center. In December 2006, the district court issued an award ordering Sierra Club and the Minerals Policy Center to pay a portion of the attorney fees and costs requested by AngloGold Ashanti and the other named defendants. Sierra Club and the Minerals Policy Center have indicated they plan to appeal the decisions to the Tenth Circuit Court of Appeals.
An arbitration case is pending between AngloGold Ashanti, and Westchester Resources Ltd and Africore Ltd. The point at issue is an action initiated by the latter two companies – which held prospecting licences in some concessions in the Ashanti region of Ghana – against the then Ashanti Goldfields. The prospecting licences, valid for one year, were issued in terms of an agreement dated 31 October 2000. In a letter dated 19 September 2001, Ashanti Goldfields advised both companies that it did not wish to extend the exploration and option agreements. This meant that the agreements with the two companies terminated on 30 September 2001, having run their full course.
Westchester and Africore disputed the cancellation of the agreements, and initiated action against Ashanti, alleging that Ashanti had failed to submit the necessary technical documentation to enable the terms of the agreements to be fulfilled. In February 2002, the court directed the plaintiffs to seek arbitration as stipulated in the agreements. The plaintiffs requested arbitration under the International Chamber of Commerce (ICC). Ashanti raised jurisdictional objections, which ICC supported. The plaintiffs have subsequently applied to pursue the matter through arbitration in Ghana. AngloGold Ashanti nominated an arbitrator in August 2006 and notified the plaintiffs accordingly. Their response is awaited.
Recognising that society cannot rely on legislation alone to regulate and guide corporate social behaviour, the company participates in a number of institutions whose focus is voluntary self-regulation through the setting of robust standards and the monitoring of performance against these.
AngloGold Ashanti supports the Universal Declaration of Human Rights and the Fundamental Rights Conventions of the ILO. We became a signatory to the United Nations Global Compact following the business combination with Ashanti in 2004. (Ashanti had been a member since August 2001.) AngloGold Ashanti is an active supporter of the Global Compact and, in preparing the Report to Society 2006, has taken the principles promoted by the Global Compact into account.
AngloGold Ashanti is a founding member of the International Council of Mining and Metals (ICMM) and actively participates in international debate as part of this organisation. We are also a member of the Council for Responsible Jewellery Practices, established to promote responsible social, ethical, human rights and environmental practice throughout the gold and diamond jewellery chain.
Furthermore, AngloGold Ashanti became an organisational stakeholder of the Global Reporting Initiative (GRI) in 2004. The GRI is a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable Sustainability Reporting Guidelines. These guidelines are for voluntary use by organisations in their reporting on the economic, environmental, and social dimensions of their activities, products, and services. Established in 1997, GRI became independent in 2002, is an official collaborating centre of the United Nations Environment Programme (UNEP) and works in co-operation with the UN Global Compact. In line with its membership and commitment to the ICMM, AngloGold Ashanti is committed to:
In line with ICMM requirements, AngloGold Ashanti is committed to good business practices in sustainable development. We have committed to implement the ICMM Sustainable Development Framework and comply with all policy statements of the ICMM. A table referring to the ICMM principles, their corresponding GRI indicators and where they may be found in this report .
While this year’s report has been prepared in accordance with the GRI 2002 Guidelines, cognisance has been taken of the G3 guidelines which were released in October 2006 and, where this has been possible, G3 indicators have been considered throughout this report.
AngloGold Ashanti subscribes to a policy of full, accurate and consistent communication in respect of both our operating and financial affairs. A formal Disclosures Policy has been adopted by the company to guide and ensure compliance with the rules of the various exchanges on which AngloGold Ashanti is listed and provide timely, accurate and reliable information to stakeholders, including investors and potential investors, regulators and analysts. This policy is available on the website. Adherence to this policy is guided by the company’s Disclosure Committee.
In the 2006 financial year, the Brazillian operations reported that AngloGold Ashanti donated $334,517 to nine political parties and politicians in the states of Minas Gerais ($252,594) and Goiás ($81,922). In Brazil, political donations are limited by law to 2% of total gross sales revenue. The donations made by AngloGold Ashanti complied with the relevant regulations and amounted to 0.15% of total gross sales revenue in 2005. The politicians to whom the donations were made included one governor, five federal deputies and five state deputies. The donations were made in the interests of maintaining working relationships with local politicians and their co-operation on policy and legal reform so as to ensure best practice regarding social development and governance.
A policy on gifts and hospitality was approved by the company’s Executive Committee in September 2005 and, a document, Guidelines on the Giving and Receiving of Gifts, was issued to employees through a formal brief from the company’s CEO, Bobby Godsell, and will form part of the induction of all new company employees.
AngloGold Ashanti has a Market Abuse (Insider trading) policy which was approved by the board in October 2002. This policy has been communicated to relevant employees and effectively prohibits employees from trading shares when they have unpublished, material information concerning the company or its operations. Timeous notice is given by the company secretary to relevant employees of closed periods as decreed by the various authorities.
In a joint process being undertaken between the Compliance Department, Asset Protection and Internal Audit, a policy and guidelines in respect of fraud and economic crimes are being compiled. It is the intention that this will be adopted by the Executive Committee and implemented during the course of 2007.
A Conflicts of Interest Policy was reviewed and adopted by the Executive Committee on 18 April 2006. The aim of this policy is to ensure that the commercial transactions of the company take place in a manner that ensures the integrity and fairness of the company’s contract and tender processes. The policy applies to temporary, part-time and full-time employees, who may have actual, potential or perceived conflicts of interest between their personal interest and the interests of the company. The human resources department of each region is responsible for identifying which employees are required to complete declaration of conflicts of interest forms. This policy has been communicated to all employees.
The company undertakes an extensive risk management process to identify significant risk to the company and its stakeholders. The board reviews and approves the risk strategy and policies that are formulated by the executive directors and senior management. Management is accountable to the board and has established a group-wide system of internal control to manage significant group risk. The risk management policies are communicated to all relevant employees. A full review of the risk, control and disclosure processes is undertaken annually to ensure that all additional requirements are incorporated into the system in the future. A detailed discussion on risk management and internal controls and the risk factors identified by the company may be on the Risk management section of the Annual Financial Statements. (See the case study on Risk management at AngloGold Ashanti ).
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AngloGold Ashanti is committed to the extension of our business principles to those with whom we do business and a document setting out our values and business principles, and their applicability to our business partners is currently being developed.
AngloGold Ashanti's Group Procurement and Supply Chain operations ensure the application of the AngloGold Ashanti principles at two levels. First, this is done contractually and only with accredited and approved suppliers where the supplier is assessed for capability as well as acceptance of the product in terms of standard and quality – where contracts have specific clauses relating to safety and health and other sustainable development issues; and second, through the strict application of the gifts policy which ensures that no supplier receives undue favour.
While the human resources and safety and health clauses that are embedded into contracts are very thorough it has been recognised that more could be done in terms of environmental and community-related issues and a task team has been appointed at a corporate level to review this issue and develop guidelines as required. In addition, whilst greater alignment will be sought between the policies and practices at operations across the group during 2007, a process is under way to assess the suppliers to the South African operations for adherence to environmental, safety and ethical conduct with oversight and intervention by the internal supplier monitoring committee chaired by the internal audit services.
AngloGold Ashanti has adopted a Code of Ethics for Employees, a Code of Ethics for Senior Financial Officers, and a Whistle-blowing Policy that encourages employees and other stakeholders to confidentially and anonymously report acts of an unethical or illegal nature affecting the company’s interests. Employees are encouraged to discuss issues with their direct managers first (if appropriate) and then if not resolved to report these through the whistle-blowing line or go directly to internal audit or legal departments. All reports made in terms of the Whistle-blowing Policy are fielded by a third party, Tip-Offs Anonymous, which ensures all reports are treated confidentially or anonymously depending on the preference of the caller. The information is relayed to management and internal audit for investigation. Feedback on reports is given when requested. A report is provided to the Executive Committee and the Board Audit and Corporate Governance Committee on a quarterly basis. Both codes and the whistle-blowing policy are available on the company website. Of the 29 cases reported in 2006, 12 were still in progress or unresolved at year-end.
| Categorisation* | Total number of cases reported |
Completed | In progress/ unresolved issues |
|---|---|---|---|
| Bribery and corruption | 5 | 1 | 4 |
| Enquiry** | 2 | 2 | – |
| Fraud | 4 | 2 | 2 |
| Grievance | 3 | 2 | 1 |
| Irregularities | 5 | 2 | 3 |
| Misconduct | 8 | 7 | 1 |
| Unfair labour practice | 2 | 1 | 1 |
| Total | 29 | 17 | 12 |
| * | The categorisation of reports is preliminary and based on the allegations made in the whistle-blowing reports received. |
| ** | Enquiry refers to whistle-blowing reports received with a request for information or for a clarification on certain issues, such as working hours or job profiling. |
Owing to the increasing number of policies and procedures in place, it has become apparent that employees require better guidance to ensure that they understand which policies and guidelines are in place, which are applicable to them and when. With this in mind, a brief guide to these policies and guidelines is being formulated at a corporate level for use in South Africa and at the other African operations, and communication to all employees on the values, business principles and policies will be reinforced in 2007.
In addition to the group-wide Code of Ethics, the company has various disciplinary procedures in place at all operations.
AngloGold Ashanti is committed to upholding human rights at our operations and to promoting human rights in the communities and countries where we do business in line with the company’s business values and business principles.
In 2006, AngloGold Ashanti developed a draft Policy on Human Rights which, following internal consultation, was put to a number of interested external parties. Once we have received and considered their comments, the policy will be formally reviewed by AngloGold Ashanti’s Executive Committee and Board of Directors and it is anticipated that it will be adopted and implemented during 2007.
The policy builds on the commitments made in the values and business principles and is in line with the company’s commitment to adhere to the Voluntary Principles on Security and Human Rights of which it has applied to become a signatory. The Voluntary Principles (www.voluntaryprinciples.org/) were developed out of a multi-stakeholder process involving governments, extractives companies and NGOs in late 2000 as a means of helping companies in the extractive sector to improve performance in relation to security-risk assessment and the control of security operatives, and to improve relations with communities over security issues. Accordingly, they focus on three main areas: risk assessment, interactions between companies and public security, and interactions between companies and private security. The secretariat to the Voluntary Principles is provided jointly by the International Business Leaders Forum (IBLF) in London (www.iblf.org/) and Business for Social Responsibility (BSR) in San Francisco (www.bsr.org/). In addition, work is being done to develop group-wide human rights training to be rolled out across the company and we will continue this during 2007.
AngloGold Ashanti Annual Report 2006 - Report to Society