Tom Butler on mining sector: “We are expected to do good not just do well”

As International Council of Mining and Metals’ CEO, Tom Butler knows very well the mining and metal sector. ICMM brings together 27 major mining companies, and aims to promote development, profits and sustainability. Let’s see how it works.

Tom Butler mining ICMM ByTheEast
ICMM's CEO Tom Butler: "Simply increasing the amount of reporting and disclosure does not build trust if people find it difficult to understand or use the information. An example of good practice is participatory monitoring, where communities monitor, for example, water quality and groundwater levels themselves, if they have concerns about water." © All rights reserved
ICMM focuses on mining companies’ values, such as sustainable development and CSR (Corporate social responsibility). How can you help them to improve their policy?

ICMM is unique in that it is not a trade body but is a CEO-led organisation that was set up to improve the environmental and social performance of the mining and metals industry. 

While there is still a long way to go, I feel that over the past 17 years, ICMM and our members have shown real leadership on the issues that affect us all – like climate change, protecting World Heritage sites and in our approach to water stewardship. Our members’ leadership in improving the performance of the industry is widely recognised by governments, investors and civil society.

ICMM’s member CEOs have agreed to adopt 38 new performance expectations our company members will be required to meet, which lay out in much more granular detail how members apply our 10 ICMM principles in the real world.

ICMM does not engage in negotiations on new projects or businesses, that is for members, but we do publish guidance that is available to members and non-members alike. See the engagement piece below. 

During a talk at Mines And Money in London last November, you mentioned 3 major guidelines to build (or restore trust): transparency, engagement, value. How is that reflected into reality? 

Simply increasing the amount of reporting and disclosure does not build trust if people find it difficult to understand or use the information. An example of good practice is participatory monitoring, where communities monitor, for example, water quality and groundwater levels themselves, if they have concerns about water.  

How miners engage with communities is very important  which is why ICMM has published best practice guidance on community developmentstakeholder engagement and strengthening community relations which are available for anyone to use.

Today, companies need to articulate their social purpose and do so from the top. Research from Australia shows that the one thing that can most positively impact a company’s reputation and trust is for the CEO to personally avow their own values and purpose. This all builds trust by society, but interestingly it also builds trust with employees. Getting this right is becoming increasingly important for attracting and retaining the brightest people which will be increasingly important in the coming years.

“Society expects companies to have a social purpose, to be proactive on climate change and on human rights.”

To build trust, you consider that the real challenge is to fill the gap between private companies, governments and local communities. How?

The UN’s Sustainable Development Goal 17 highlights the importance of partnership if we are to successfully tackle the biggest issues facing us all, and it is the first time the private sector has been explicitly identified by the UN as a key partner in the solution to many of the world’s challenges. The SDGs are a real opportunity for mining companies to partner with governments and civil society that must not be missed. 

OK, I can imagine this partnership has to be built on transparency. During your talk in London, you mentioned that paying taxes where the value is generated is a key-point. What about mining companies’ policy on this topic?  

What I was trying to say is that taxes should be paid in the jurisdiction where the value is generated. In that context, the mining sector actually has a good track record, compared to certain other sectors. Despite volatile commodity prices over the last five years, ICMM members contributed over $100 billion in corporate taxes and royalties in the 50 countries they operate in. The ratio of tax and royalty charge to profits before impairments was 43.4%. The way to encourage this is through transparency. ICMM members all comply with a commitment to disclose all of their payments in Extractives Industry Transparency Initiative(EITI) countries, and ICMM is a leading supporter of EITI, which has over 50 member countries.

As ICMM’s CEO, you travel all over the world. What are the new trends of the mining sector?

Environmental, social and governance issues have become and will continue to be more important. Society expects companies to have a social purpose, to be proactive on climate change and on human rights. The days are gone when the ‘social contract’ was that companies should look after their employees and shareholders, pay their taxes, and do no harm to the environment and surrounding communities. Today we are expected to ‘do good not just do well’ – and we need to demonstrate how we are going about it. Increasingly, if we cannot do this, we will find our access to finance and markets under threat, let alone access to our projects.

Today, which mining products are the most needed? What projections can you make?

If we are to meet the Paris Agreement climate target of keeping global warming to well below 2ºC, every country will need more copper cobalt and lithium. But they will also need more iron ore and metallurgical coal and other mined products for if countries are to build the infrastructure for alow-carbon future. 

The decarbonization of the global economy will place great demands on the mining sector but I am sure that miners will rise to the challenge.

A Chinese company recently bought Rio Tinto’s shares in the uranium mines from Namibia, in order for China to secure supplies for the development of its nuclear plants. What role could play the mining industry in the energy transition?

ICMM does not have an explicit position on nuclear energy, but we do on climate change. Nuclear energy will play an important role in some countries’ plans to reduce their greenhouse gas emissions and those of our members that mine uranium will continue to fuel the nuclear industry.