Stakeholder Engagement

Management Approach

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. 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.

Sherritt is committed to building and maintaining respectful, strong and trusting partnerships with Indigenous communities impacted by, or with an interest in, our mining and refining activities.

Sherritt does not have proven or probable reserves in or near Indigenous lands. The Fort Site is an urban refinery and as such has not historically identified any Indigenous communities as key stakeholders. Nonetheless, as the Fort Site implements the updated TSM Indigenous and Community Relationships Protocol, it will actively seek to identify Indigenous communities and organizations and, as appropriate, actively build meaningful relationships, implement engagement and decision-making processes, and respond to feedback. In 2021, efforts will be launched to ensure that Indigenous Peoples have equitable access to opportunities with the company. In Cuba, there are no distinct Indigenous communities still in existence.

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.

Sherritt’s Key
Stakeholder Groups
Employees and their representatives Communities Governments
Financial community Business partners Customers and suppliers
NGOs/Civil Society Media

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 in our Human Rights section, 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.

Performance

Community Relations

We continue to engage regularly with the communities near our operating sites in all of our jurisdictions. We took part in 15 community meetings in 2020 – a significant reduction compared to 2019, mainly due to restrictions imposed across the divisions due to the COVID-19 pandemic. Sherritt is 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, although a number of these activities were restricted in 2020 due to COVID-19. A weekly newsletter produced by workers at the Moa Nickel Site has been in circulation since 1979 and is widely 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 12 community meetings in 2020, mainly held during the first quarter. 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.

Community Grievances

In 2020, the Fort Site received two minor environmental grievances from other neighbouring companies located within the Fort Site footprint. Only one of these grievances was sourced to Sherritt operations and the process was adjusted.

No other community-related grievances were reported to Sherritt or its joint venture partners through the state-run community grievance mechanism in Cuba.

Government Relations

In 2020, government relations activities were limited or reduced to video conferences due to COVID-19 restrictions. However, these activities focused on maintaining key relationships and addressing regulatory and political risks and opportunities in the jurisdictions where we operate. Throughout the year, meetings with representatives of national, provincial, regional and local governments, state-owned enterprises, diplomatic missions and multilateral organizations were more limited than in previous years. Priorities included:

  • Conducting meetings (a considerable number over the course of the year) with government officials and various industry partners for the purpose of information exchange related to COVID-19 response and support, as well as post-COVID-19 economic recovery;
  • Engaging with officials within the Cuban government and maintaining relationships to advance mutually beneficial projects, secure approvals for regulatory matters, and support development priorities;
  • Continuing discussions with the regulator on the Fort Site’s operating permit renewal, which was approved and renewed for a 10-year period by the provincial regulator;
  • Advocating for approvals of community development projects with government officers and funding for Cuba;
  • Building and maintaining relationships with the Alberta and Canadian governments;
  • Soliciting input from municipal and regional government representatives on key priorities for the Cuba Community Investment Program; and
  • Encouraging stronger Canada–Cuba relations.

During 2020, we participated in approximately 80 government meetings across Sherritt. Due to COVID-19 restrictions, the majority of these meetings were held virtually or over the phone.

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

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 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.

Sherritt is a proud co-funder of the project “Empowering Women’s Leadership and Participation in the Renewable Energy Sector in Cuba”. This multi-year project is also funded by Global Affairs Canada and the Cuban Government, and is being implemented by Cowater International. The project aims to enhance the social and economic well-being of women and vulnerable communities through the use of renewable energy in Cuba. To learn more about this project and partnership, please see this case study.

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 2020 here.

Multi-Stakeholder Initiatives and Associations

In 2020, 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.

Held a position on the governance body in 2020 Participated in projects or committees in 2020 Provided substantive funding beyond routine membership dues in 2020 Views membership as strategic
Cobalt Institute
Canadian Institute of Mining’s Diversity and Inclusion Advisory Committee
Devonshire Initiative
Diadem Group
Fertilizer Canada
Fort Air Partnership (FAP)
Fort Saskatchewan Chamber of Commerce
Life in the Heartland
Mining Association of Canada
Nickel Institute
Northeast Capital Industrial Association (NCIA)
Northeast Region Community Awareness and Emergency Response
Prospectors & Developers Association of Canada
Responsible Minerals Initiative
Voluntary Principles Initiative
Canadian Centre for Women in Science, Engineering, Trades and Technology (WinSETT)

Community Development

Management Approach

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 to provide 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; and
  • 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 Canada as part of the design process.) The Standard enables employee-led community investment review committees 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.

Performance

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 C$500 million in economic benefits to local communities and host governments in Canada and Cuba. For the Cuba operations, local benefits are considered at the national level and for the Fort Site operations, local benefits are considered at the provincial level (Alberta). 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 12.55 31.33 5.93 49.81
Local/national procurement2 164.91 164.47 35.36 364.74
Local salaries, wages and benefits 99.57 54.22 12.44 166.23
Community investment3 0.07 0.29 0.19 0.55
Economic benefit footprint4 277.09 250.30 53.93 581.32
1Reported in USD; converted using Bank of Canada’s 2020 average exchange rate of 1.3415.
2For the Cuba operations, local procurement is calculated at the national level. For the Fort Site operations, local procurement is calculated at the provincial level (Alberta).
3Includes in-kind valuations.
4This 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.
(C$)

Approximately 63% 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 2020 ESTMA Annual Report is available online.

Community Investment

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 apply a gender lens to both the analysis of the issue and the preferred outcomes.

Overall, Sherritt’s total amount allocated towards community investment continued to decrease in 2020. Austerity measures were in place for OGP, Moa Nickel, the Fort Site and Corporate in 2020. These measures, paired with various restrictions imposed due to the COVID-19 pandemic, affected Sherritt’s involvement in annual fundraising and volunteer activities aimed at supporting surrounding communities. As such, community investments remained low; however, all sites made efforts to better align their community investments with local priorities.

In Cuba, we have been providing annual funding for important multi-year 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, 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 2020.

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 updated annual 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 the 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. Sherritt extended this partnership into 2020 and is currently exploring a new multi-year partnership. Read more here, including a 2020 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 was updated in 2020.

In 2020, the Moa Nickel Site recorded over 4,000 hours of employee volunteer time during work hours and over 5,000 hours of volunteer time during non-work hours. Examples of ways in which employees at the Moa Nickel Site gave back to the local community included the maintenance of roads, clean-ups and community gardening. Read more about the volunteering program at the Moa Nickel Site here.

The annual Make-A-Wish Rope for Hope event at the Fort Site was rescheduled to 2021. However, the Fort Site executed the annual Tannis’ Toys for Tots and the Food Bank drive by moving to online donations, with no in-person volunteering at the Food Bank in 2020 due to COVID-19 restrictions. Every December, the Fort Site and the Technologies Division supports the local Fort Saskatchewan Food Gatherers Society. Our employees assist in collecting food, toys and monetary donations for those in need. In 2020, Sherritt and its employees proudly donated $5,900 and a truckload of food and toys.

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 2020, Sherritt’s employees had donated more than $345,000 over the last six years to the United Way. The Fort Saskatchewan site’s United Way campaign raised over $60,000 for the Capital Region. Funds were raised through events and employee contributions, as well as a $15,000 company donation.

Sherritt partnered with and supported the Elk Island Public School Board Foundation and 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. However, in 2020 the conference had to be cancelled due to COVID-19.

Sherritt’s head office for OGP is located in Calgary, Alberta. For over 13 years, OGP has partnered with Alberta Children’s Hospital to host a fundraiser, and in 2020 over $22,500 was raised. In 2020, OGP officially hit $1 million in total donations in support of this charity.

All references to dollar values are in Canadian dollars unless otherwise specified.