How is Barrick’s new sustainability vision changing the way you approach community engagement in Peru?
Manuel Fumagalli: The new vision has reinforced and focused us much more on creating wealth, not only for our shareholders, but for the communities around us, our employees, and all of our stakeholders. This is something that we did before but the vision has put an even higher importance on that aspect and a big focus on responsible mining. In the past, there wasn’t always enough coordination between the mine operations teams and the sustainability side of the business. This began to change several years ago, and the new vision has made the partnership between these groups even stronger.
Today, Barrick’s executive directors and mine general managers are jointly accountable for all license to operate matters. Manuel explains how that relationship works.
One of the more important sustainability initiatives in Peru is the artisanal mining project? What is that project?
MF: Historically, there has been a lot of artisanal coal mining in the region surrounding the Lagunas Norte mine. These miners were not authorized to carry out this activity, and they are known in local parlance as informal miners. Through the years, we’ve had requests from the artisanal miners to sign an agreement that would allow them to mine coal on land that falls within our mining concession. However, the law didn’t authorize us to do so. In 2012, the government modified the legal framework to allow for formalization of artisanal miners. We created a register of all such miners in the area and helped them organize as a business entity. We helped them prepare and file necessary documents to obtain required permits from regulators, and we supported them throughout the formalization process. So it was really a partnership between the government, the artisanal miners and us, and they ultimately got their formal recognition and are now legally able to mine. They don’t have to fear being audited. They can get loans from the bank and they can get support from the government.
Another important project in Peru is the local supplier program. Can you give an overview of that initiative?
MF: Local employment and procurement are key features of our community engagement in Peru. We want to give local communities an opportunity to develop skills via direct jobs at the mine, as well as contract work and local procurement. We want to help local businesses develop skills so that they can provide services not only to us but to other clients. Last year, we made $14 million in purchases from local businesses and 100 percent of the non-skilled labor at Lagunas Norte came from local communities. As for skilled jobs, a growing percentage of workers come from local communities. On the procurement side, we hired a consulting firm to help us help develop skills and best practices and some local businesses are already providing services to other companies, in addition to Barrick. That’s very positive and something that we are going to continue.
In Peru, social conflict is one of the biggest challenges for mining companies. Manuel explains how his team addresses this challenge through community engagement.
How are we integrating digital technology into sustainability-related functions in Peru?
MF: Innovation doesn’t need to be new cutting-edge technology that has yet to be discovered. Innovation can start from improving our processes, getting rid of paper, being much faster in communications and information sharing. For instance, we recently rolled out an app—developed in-house—that allows our people to quickly prepare reports while they’re in the field and send them immediately to others in the organization. This is facilitating faster information flows to decision makers allowing us to be more nimble. Also, on the environmental front, and this is linked to the closure at Pierina, we’re moving forward on a very interesting project to digitize water management. What this means is that we will put monitors, sensors and programs in place that can help us manage the water in an autonomous, faster, and more secure way. And that’s key when you have so much rain like in a site like Pierina.
The Pierina mine is in progressive closure, can you talk about this process and the community engagement around it?
MF: Pierina is one of the first large-scale mines to close in the country, so we want to create a benchmark that can be replicated when, eventually, we close other sites, and for the whole sector. It is a large undertaking because you not only have to manage environmental issues such as water but also community expectations and concerns. So, there is a big communications component and community engagement effort to explain exactly what this means and all the safety checks that we do to make this a safe closure. One thing we are trying to do is support programs to build skill sets outside of mining. One of those programs involves digital acumen. We are partnering with Cisco to set up its Net Academy in communities near Pierina so that residents can learn new skills for the digital era. We hope to launch a pilot shortly, maybe in the coming months.
Manuel Fumagalli is Executive Director for Barrick in Peru. In his role, he oversees all license-to-operate matters, including government and community relations. He holds a Master’s Degree in Environmental Law and Natural Resources from the University of Denver, Colorado. He joined Barrick in 2004 as Legal Counsel in Peru, and was later promoted to Regional Legal Director of Barrick South America. He has held his current role since 2013.