Stakeholder engagement is critical for establishing a mutual understanding of one another’s needs, interests, aspirations and concerns. That perspective is a key input for making decisions to support business objectives related to growth, risk management and operational excellence, and for collaborating to address local stakeholder priorities. Simply put, constructive stakeholder relationships are essential to securing and maintaining our social licence to operate and creating mutually beneficial outcomes.
Sherritt’s approach to stakeholder engagement is to systematically identify its stakeholders and engage with them through ongoing dialogue, sharing information about the company’s business, responding to questions, listening to their observations and acting to address their concerns, as appropriate.
In general, we prioritize our level of engagement with different stakeholder groups based on their proximity to – and interest in – our activities and their ability to influence our business. At the operational level, the practical outcome of this prioritization is that our workforce, business partners, local communities and host governments tend to be our most important stakeholder groups. The diagram below shows our key stakeholder groups at both the corporate and operational levels.
|Employees and their representatives||Communities||Government|
|Financial community||Business partners||Customers and suppliers|
||Industry peers and associations|
Our engagement tactics vary based on the nature of the interaction and the stakeholder groups involved. For instance:
- We engage regularly with local communities and employees through formal meetings and town halls, small group and one-on-one interactions, surveys and grievance mechanisms.
- We work closely with our business partners through governance bodies and ongoing discussions to address material issues and opportunities.
- Our procurement and marketing teams are in constant communication with our suppliers and customers to ensure smooth operations and customer satisfaction.
- Our investor relations department manages proactive and reactive interactions with investors, analysts and media, always in accordance with securities requirements.
- We meet with government officials in our home country and operating jurisdictions to build relationships, manage regulatory affairs and advocate on policy issues of importance.
- We manage partnerships with developmental NGOs and respond to advocacy groups, as needed.
- We take an active role in various industry associations to advance sector-wide concerns and sound science, align with broader expectations, gain a broader perspective on the industry and contribute to innovation.
Corporate Standards to Support Stakeholder Engagement
We have specific requirements for engaging investors, media, government and employees; however, to ensure there is a consistent approach to stakeholder engagement across the company, our Stakeholder Engagement Standard applies enterprise-wide. The standard describes our expectations for stakeholder identification and mapping, annual engagement planning, engagement processes and practices, how to record dialogue, and how to respond to feedback and views received from stakeholders.
An important aspect of engaging with our stakeholders and building social licence is listening and responding to community concerns and incidents. Our ongoing community relations activities are designed to capture and resolve most of these issues before they escalate. But for those issues that do, it is important to have a credible community grievance mechanism in place. As described under Human Rights, all sites have a mechanism in place. We have a company-wide Grievance Management Standard to provide clear expectations on how we collect, classify, investigate, respond to and close out operational-level community grievances.
Diverse Operating Environments
Although we see the value in taking a structured and consistent approach to stakeholder engagement at all of our sites, the breadth and depth of engagement activities varies, given the disparate nature of our operating environments. The Fort Saskatchewan refinery (COREFCO) has been in operation since 1954 and is located within the city limits of a well-developed urban area near Alberta’s capital. It is situated within an industrial zone with several other heavy-industry businesses. Local residents are familiar with the nature of industrial activities, including their benefits and potential risks. Because of this level of awareness and understanding, and our mature relationships in the community, we can take a very targeted approach to our engagement activities with the community, government and industry. Watch this video to learn more about life in Fort Saskatchewan.
In Cuba, we have two longstanding joint ventures with state-owned entities, and have an economic association with the government to operate our Oil & Gas business. As such, our engagement is focused on our partners and the central government. For community investment initiatives, we work closely with provincial and municipal governments and with donors and non-governmental organizations that have a presence on the island. We see opportunities to build on our good relations with the government to ensure that our evolving approach to engagement aligns with the Cuban operating environment, which itself is becoming more accessible to foreign investors.
We continue to engage regularly with the communities near our operating sites in all of our jurisdictions. We took part in 43 community meetings in 2019, and are pleased to report that there were no significant community incidents or disruptions during the year.
Moa is an industrial town, much like Fort Saskatchewan, and most of the local population works in the mining industry in some way. Throughout the year, the Moa Nickel Site supports – and participates in – cultural, sporting and other community events in Moa. A weekly newsletter produced by workers at the Moa Nickel Site has been in circulation since 1979 and is very well read by the local community.
In Cuba, we participated in 21 meetings involving municipal and provincial authorities in Moa and the communities near the OGP facilities. Meetings primarily related to the planning, execution and review of community development projects.
The Fort Site staff participated in a total of 22 community meetings in 2019. This participation included direct engagements with municipal authorities, educational institutions, charitable organizations and industry; open houses; and multi-stakeholder meetings such as those led by the Northeast Capital Industrial Association. These interactions provide us with insights into the cultural, social, political and industrial fabric of the community, as its aspirations and concerns evolve.
We also make special efforts to stay connected with former employees. As the refinery has been operating for more than 60 years, there are many multi-generational families of workers – as well as “alumni” – living in the area who remain interested in the company and who serve as our informal ambassadors. For many years, we have been contributing to the Sherritt Seniors’ Club, whose membership consists of Sherritt retirees based in Fort Saskatchewan. They take tremendous pride in their years at Sherritt and are among the company’s greatest ambassadors. As a token of appreciation, Sherritt supports an annual Club dinner, where senior management has the opportunity to interact informally with this important stakeholder group and provide an update on the company.
In 2019, the Fort Site received one community grievance related to an odour complaint from a neighbouring facility which was investigated and closed.
No other community-related grievances were reported to Sherritt or its joint venture partners through the state-run community grievance mechanism in Cuba.
In 2019, government relations activities focused on building key relationships and addressing regulatory and political risks and opportunities in the jurisdictions where we operate. Throughout the year, we met regularly with representatives of national, provincial, regional and local governments, state-owned enterprises, diplomatic missions and multilateral organizations. Priorities included:
- Engaging with newly appointed officials within the Cuban government and maintaining relationships to advance mutually beneficial projects, secure approvals for regulatory matters, and support development priorities.
- Advocating for climate change regulations in Alberta that are science-based and fair to trade-exposed industries.
- Continuing discussions with the regulator on the Fort Site’s operating permit renewal, which received a second extension in 2019 until January 2021 due to resourcing constraints of the provincial regulator.
- Advocating for approvals of community development projects and funding for Cuba.
- Building and maintaining relationships with the Alberta and Canadian governments.
- Encouraging stronger Canada–Cuba relations.
During 2019, we participated in approximately 80 government meetings across Sherritt. Additional information on our political and regulatory risks can be found in our Annual Information Form, including an overview of how we are affected by the U.S.’s Cuba embargo and the Helms–Burton Act, which, among other things, prohibit us from doing business in the U.S. or with American entities.
Partnerships with non-governmental organizations (NGOs) and other civil society organizations continue to play a key role in our approach to addressing stakeholder issues and opportunities. Over the years, we have enjoyed mutually beneficial relationships with NGOs in Canada and Cuba.
Sherritt partnered with UNICEF Canada to deliver a road safety program in Cuba, where the leading cause of death among young people is traffic accidents. The partnership, announced publicly in early 2018, provides three years of funding for the initiative. Read more about it here.
In 2018, Sherritt’s Fort Site partnered with the Canadian Centre for Women in Science, Engineering, Trades and Technology (WinSETT) on a research study to improve diversity and inclusion. Read more about our work on workplace inclusion in 2019 here.
Multi-Stakeholder Initiatives and Associations
In 2019, we participated in several multi-stakeholder initiatives and industry associations to engage in constructive dialogue and/or strategic activities with stakeholders who share a common interest in the issues that matter to our business. Below is a list of the groups in which we participated last year. Significant topics they pursued included application of voluntary standards, understanding and influencing regulatory developments in various jurisdictions, sharing and developing best practices, improving governance in the sector, identifying emerging trends, opportunities and risks, and broadening networks and perspectives.
Now more than ever, stakeholders – from local communities to host-country governments and civil society organizations – expect to experience tangible benefits and improvements to their standard of living from natural resource extraction and processing. This is particularly true in jurisdictions where economic development has been lagging, infrastructure is lacking and human development indices are low.
Managing the expectations of local stakeholders, particularly in less-developed jurisdictions, is paramount. When a large business enters an undeveloped jurisdiction, there are often expectations that it will solve many, if not all, of the area’s inherent socio-economic challenges. We are committed to helping improve the lives of people near our operations, while relying on host-country governments to discharge their obligations regarding basic services, particularly in the areas of health, education and infrastructure.
Because of the diverse operating contexts of our sites, local community development priorities vary significantly. As such, we have adopted a flexible approach to community development, while at the same time establishing company-wide guidance that ensures our values and expectations are preserved. In each jurisdiction, our investment decisions strive to support:
- Socio-economic development
- Public health and safety
- Natural and cultural heritage
In addition, our Community Investment Standard aligns with evolving good practice to maximize the value of our contributions, both to the recipients and to our business. (The standard was assessed by London Benchmarking Group (LBG) Canada as part of the design process.) The Standard enables employee-led community investment review committees (CIRCs) at divisional/site and corporate levels to provide governance and oversight of decision-making. We take great care to avoid real or perceived conflicts of interest and to ensure spending complies with our business ethics and anti-corruption policies.
Economic Benefit Footprint
When evaluating the overall financial impact that our presence delivers at local and national levels, we measure our economic benefit footprint, which includes payment of taxes, royalties and regulated fees to governments; the procurement of goods and services at the local and national levels; payment of local salaries, wages and employment benefits; and community investment spending. In 2019, our operations generated more than $500 million in economic benefits to local communities and host governments in Canada and Cuba. The following table presents a breakdown of our economic benefit footprint for the year.
|Indicator Components (C$ millions)||Fort Site||Moa Nickel Site1||OGP||Total Sherritt|
|Payments to governments||10.14||27.62||8.50||46.26|
|Local salaries, wages and benefits||108.47||53.39||12.73||174.58|
|Economic benefit footprint4||285.82||189.24||58.76||533.82|
1 Reported in USD; converted using Bank of Canada’s 2019 average exchange rate of 1.3269.
2 For the Cuba operations, procurement is calculated at the national level. For the Fort Site operations, procurement is calculated at the provincial level (Alberta).
3 Includes in-kind valuations.
4 This calculation includes the sum of the value of spending on local suppliers, local salaries and wages, payments to governments, and community investment. All are reported on a 100% ownership basis.
Approximately 59% of our benefit footprint results from the purchase of goods and services from local- and national-level suppliers serving our operations.
Local salaries and wages account for our second most significant contribution, reflecting the importance of our sector in raising the standard of living and creating wealth in communities adjacent to our operating sites through well-paying jobs.
Our payments to governments represent a significant contribution to host countries and communities. We strive to ensure that these payments are openly and transparently reported, so that our contributions to national, regional and local governments are recognized, and to encourage accountability for the spending of those funds, which should go towards building essential infrastructure and increasing access to education and healthcare, especially for populations near our operations. Sherritt’s 2019 ESTMA – Annual Report is available online.
Community investment expenditures represent a small percentage of our total economic benefit footprint, but we endeavour to achieve maximum local impact with these dollars spent or donated. The majority of Sherritt’s community investment continues to go towards socio-economic development in jurisdictions where we operate. Where possible and in alignment with the priority indicated in Canada’s Feminist International Assistance Policy, as well as our own strategic priority focus on diversity, Sherritt also donates to initiatives that incorporate a gender lens to both the analysis of the issue and preferred outcomes.
Overall, Sherritt’s total amount allocated towards community investment continued to decrease in 2019. Austerity measures were in place for OGP, Moa Nickel Site, Fort Site and Corporate in 2019 and will continue into 2020. As such, community investments remained low; however, all sites made efforts to better align their community investments strategically.
In Cuba, for several years we have been providing about half a million dollars in annual funding for important projects relating to public health and safety, transportation, sanitation, education and culture in communities adjacent to our operations. As part of the Community Investment Program (CIP), Sherritt assists with yearly donations, demonstrating its longstanding commitment to sharing prosperity with the Cuban people. Every project we fund is directly linked to Cuba’s national, provincial and/or local development priorities. We believe that Cuba provides a model in development planning for other jurisdictions, and we are proud to support the country’s efforts. Refer to this case study for additional information on our contributions to Cuba in 2019.
At the Fort Site and in Calgary and Toronto, where we have administrative offices, community investment is less significant and is used to support employee engagement, philanthropy and meeting the needs of the less fortunate. Refer to this case study for more information on our Spirit of Sherritt program.
Sherritt once again sponsored the International Women in Resources Mentoring Programme (IWRMP), with the aim of providing female mentees in industry with a productive mentoring relationship, the purpose of which is to retain future leaders and create a more diverse pool of internal candidates. Sherritt sponsored employee participation in the program for the third year in a row.
In 2017, Sherritt signed a three-year partnership with UNICEF Canada to support the Child Road Traffic Injury Prevention Programme in promoting road safety among young people. Read more here, including a 2019 program update.
In 2019, Sherritt signed a four-year partnership with the Trans Canada Trail to support the construction and installation of a new underslung pedestrian walkway and Trail section across the North Saskatchewan River. Read more about this partnership here.
Employee Volunteerism and Giving
Sherritt employees have long been active participants in the communities where we operate, both during and outside of work hours. Sherritt’s Community Investment Standard further encourages and better organizes employee volunteerism through a variety of delivery options. The result has been a significant increase in both the amount of volunteer hours and the recording of hours already occurring on a regular basis. Sherritt’s Community Investment Standard will be updated in 2020.
In 2019, the Moa Nickel Site recorded over 8,000 hours of employee volunteer time during work hours and over 6,000 hours of volunteer time during off hours. Employees at the Moa Nickel Site contributed to saving lives through the employee blood donation program, and gave back to the local community, for example, through maintenance of roads, clean-ups and community gardening. Read more about the volunteering program at the Moa Nickel Site here.
In 2019, the Fort Site continued to roll out the Spirit of Sherritt program. Fort employees donated 198 hours of company time to non-profit and charitable causes that were meaningful to them in the Greater Edmonton Area. As a result, Sherritt donated to causes supported by employees who volunteered their own time in charities supporting local food banks, children’s health, the arts and community children’s sports associations. To learn more about this and other employee-led initiatives, refer to this case study.
Through an annual employee giving initiative at the Fort Site, employees elected to donate a portion of their pay to the United Way, supporting various local charities. As of 2019, Sherritt’s employees had donated more than $285,000 over five years to the United Way.
In celebration of the refinery’s three billion pounds of nickel, employees chose to donate $10,000 to the Fort Saskatchewan Food Gatherers Society. Additionally, Sherritt supported the Young Scientist Conference with a $10,000 donation to support the 2018, 2019 and 2020 conferences. The Young Scientist Conference hosts over 250 students, allowing them the opportunity to participate in a variety of hands-on science activities.
Sherritt’s head office for OGP is located in Calgary, Alberta. For over 10 years, OGP has partnered with Alberta Children’s Hospital to host a golf tournament fundraiser. In 2019, nearly $75,000 was raised, bringing the multi-year total to over $975,000. This year, the funds raised were destined to purchase a 3D scanner for prosthetics and orthotics. In addition, employees raised over $18,000 for Alberta’s annual Ride to Conquer Cancer.