Hudbay 2014 Annual and CSR Report – Community Relations

We understand that earning our social licence means effectively engaging with people so they understand how mining will change their community and how mining can strengthen it too. We must address their concerns about mining and competing land use priorities, and demonstrate how our operations can provide meaningful, long-term benefits. And, above all, we must earn and maintain respect, trust, understanding and collaboration. On this foundation, stable relationships are built.

Each business unit conducts its own stakeholder analysis and implements a stakeholder engagement plan to build relationships, understand local concerns, and respond to them. This practice is now documented in our newly adopted Stakeholder Engagement Standard. We also implemented a company-wide Community Response Standard (also known as a grievance process) to ensure complaints can be signaled and then appropriately documented, investigated and addressed.

In Manitoba, we engage regularly with the Flin Flon and Snow Lake communities. Recent discussions have focused on training and job opportunities for the people of northern Manitoba (see Local Hiring and Skills Development), the impact of the Lalor mine on the town of Snow Lake, and engagement with First Nations communities.

We place particular emphasis on engagement with First Nations communities locally. Through meetings, school presentations, mine tours, open houses and working together on joint initiatives (usually related to employment), we seek to improve understanding of one another and build constructive relationships. Hudbay’s full-time Aboriginal liaison officer coordinates our efforts and facilitates dialogue. In addition, two senior Hudbay representatives participate in the Minister’s Mining Advisory Council, which brings together First Nations leadership, industry representatives and the Government of Manitoba to ensure First Nations communities benefit from the development of new mines.

Hudbay is also a member of the Canadian Council for Aboriginal Business (CCAB) and participates in its Progressive Aboriginal Relations (PAR) program. Our objective is to progress from PAR’s “committed” category to the bronze certification level. Certification confirms that we have practices in place to be a good business partner and great place to work, and demonstrates our commitment to prosperity in Aboriginal communities.

In Peru, there are two communities within our direct area of influence – Uchucarco and Chilloroya. Both signed life of mine land use agreements with Hudbay in exchange for portions of their community-owned land. We maintain community relations offices in both communities and engage frequently with residents on a wide range of topics, most often related to fulfilling commitments under the agreements.

There are six communities within our indirect area of influence. By year-end 2014, we had signed co-operation agreements with four of the communities, in which we commit to working together on social development projects within a specified budget provided by Hudbay. We engage with different levels of district, provincial and regional governments, generally working to facilitate partnerships and agreements between governments and communities that promote social development.

circles-of-influence — Circles of influence

In Arizona, we are planting roots in the community and building relationships with regulators as a Hudbay business unit. We believe that a robust permitting process contributes to the development of world-class mines and it is in that spirit that we are engaging in the regulatory process to secure the final permits needed to advance the Rosemont project.

2014 Performance

On September 16, 2014, we held the official openings of the Lalor and Reed mines. Opaskwayak Cree Nation Elder Nathan McGillivary participated in the proceedings, with prayers in Cree and English and smudge ceremonies. Company officials, government representatives, invited guests and employees were present at both locations (see case study). The celebration continued a few days later when Hudbay staff organized a pancake breakfast for the Snow Lake community.

In Manitoba, we increased our engagement with the Flin Flon Friendship Centre, a community centre that plays a pivotal role in the delivery of community-focused programs and services for Aboriginal Canadians. Several employees participated in National Aboriginal Day cultural activities and served a barbeque lunch to the many local participants. Hudbay and the Friendship Centre co-hosted a presentation by the Manitoba Treaty Commissioner on the importance of treaties. We also collaborated with the Saskatchewan Indian Institute of Technologies to deliver outreach presentations to several First Nations Saskatchewan communities.

Hudbay representatives made presentations to the Snow Lake town council and Chamber of Commerce regarding Lalor procurement practices and the mine camp, which houses about 70 Hudbay employees. For various reasons, we have found it challenging to recruit a sufficient workforce in Snow Lake and had to request an extension of our camp permit, which we recognize is not in keeping with Snow Lake’s aspirations. Town council voted to extend the permit to the end of 2016.

In Arizona, senior company officials, including CEO David Garofalo, met with many community leaders to understand their aspirations and concerns, and discuss how we can work with them to build a successful and sustainable project that benefits the region. As part of the transition, following Hudbay’s acquisition of Augusta, we wrote to an extensive list of supporters, introducing Hudbay and expressing our appreciation for their enthusiasm for the project and its potential to add to the economy and communities of southern Arizona. Senior leaders also met with local media to introduce the Company, answer questions, and describe the path forward for the project as a Hudbay business unit.

We continued to support community programs set up by Rosemont such as well owner protection plans, funding for community pipeline construction, and other water replacement mitigation plans like the purchase of surface water for recharge to ensure that all groundwater used by the project is replaced and the project is neutral for water use.

In Peru, we continued our work with the local communities, fulfilling the social development commitments made under our agreements with them. There was one community dispute related to the Uchucarco agreement, which was peacefully resolved. Our community relations team also worked to prepare the community for the end of project construction through clear, open communications including a poster campaign.

Community responses registered through formal processes:

In Manitoba, there were seven complaints registered: two were minor environmental concerns that were resolved; and four were society concerns, two of which were resolved and two of which continue to be addressed. One was found not to be within Hudbay’s responsibility or scope of influence, so we directed the grievant towards more appropriate venues for resolution.
At Constancia, there were 74 complaints or concerns registered from local communities in 2014. Of those, 88% were resolved by year-end, with the remainder still being processed. See the pie chart for a breakdown of the types of concerns.

Constancia Community Concerns

Local supply chain – mainly related to vehicle maintenance expenses and payments for services, and food (food quality from local providers and pending payments by third-party contractors)

Labour practices – mainly related to lack of payment for non-worked days (certain employees are allowed days off to attend community meetings)

Other – payments for use of land, procedures, accomplishment of commitments, environmental questions, resettlement, etc.