Responsible Production and Supply

Society and markets are increasingly demanding responsibly and ethically produced goods. Downstream customers of Sherritt are, in turn, increasingly requesting policies and management systems and supply chain due diligence to ensure responsible mineral production and supply.

Sherritt is committed to extracting and producing minerals that meet its stakeholders’ social, ethical, environmental and human rights expectations and to advancing that commitment with its joint venture partners and their suppliers and customers.

Management Approach

Sherritt’s responsible sourcing strategy considers the sourcing, production and supply of minerals. Our Human Rights Policy and Environment, Health, Safety and Sustainability Policy identify our commitments and expectations. We work collaboratively with our partners, experts, industry consortia, peers and customers to fully understand the properties and potential impacts of our products throughout their supply chains and life cycles.

We continue to make progress against plans to ensure we have the appropriate policies and due diligence management systems in place to address the requirements of the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.  Sherritt remains engaged with the Mining Association of Canada, the Responsible Minerals Initiative, the London Metal Exchange, the Nickel Institute and the Cobalt Institute in order to align with recognized responsible sourcing initiatives, standards and frameworks. Sherritt advocates for the adoption of all of these requirements by its partners, subsidiaries and joint venture organizations.

Sherritt has a robust management system in place to manage environmental and social risks and to meet or exceed performance targets.

The figure below shows Sherritt’s responsible production and supply due diligence approach:

Establish clear policies, standards, and management systems
Identify and assess risks in the supply chain
Develop plans to manage risks
Subsidiary and JV supply chain due diligence
Independent audit of due diligence systems
Public disclosure

Governance

Sherritt’s Board of Directors (the Board) has an independent chairperson, and three sub-committees that provide support with respect to environmental, social and governance (ESG) and responsible production and supply matters: the Audit Committee, the Human Resources Committee and the Environment, Health, Safety and Sustainability (EHS&S) Committee. The EHS&S Committee assists Sherritt’s Board in its oversight of ESG issues by providing direction and by monitoring and reviewing the Corporation’s performance related to responsible production and supply, among other areas. The mandate of the EHS&S Committee can be found on the Corporation’s website.

The Moa Joint Venture (JV) has a Board of Directors that provides oversight of its responsible sourcing performance. Members of Sherritt’s executive team represent Sherritt on the Moa JV Board. The Moa JV has chartered a task force to develop, action and maintain a plan to drive alignment with recognized responsible sourcing initiatives, standards and frameworks.

As part of a baseline assurance process, the JV task force commissioned a baseline independent OECD-aligned audit of its responsible production and supply policies and due diligence management systems. The scope of the audit covered the Cobalt Refinery Company (COREFCO) in Fort Saskatchewan, Alberta, as the choke point in the mineral supply chain.

Performance

2020 and recent highlights:

  • Updated the Conflict-Affected and High-Risk Areas (CAHRA) assessment of the Moa JV feed supplies, which concluded that the JV does not source from, operate in, or transit through any conflict-affected or high-risk areas;
  • Completed an independent OECD-aligned audit of subsidiary and Moa JV responsible sourcing policies and due diligence management systems;
  • Updated the Mineral Feed Policy, which establishes Moa JV commitments to responsible feed sourcing that are aligned with OECD requirements and industry best practice;
  • Developed a Supplier Code of Conduct, which identifies expectations of subsidiaries and suppliers to the Moa JV in order to provide responsibly sourced minerals and to implement policies and management systems that are aligned with OECD requirements and with good industry practice;
  • Developed a subsidiary Supplier Declaration document that requires suppliers to declare their commitments to the Code of Conduct and identify risks in their supply chain;
  • Developed a subsidiary Grievance Standard to ensure that grievances that may occur across the mineral supply chain will be addressed anonymously and appropriately;
  • Completed an independent Towards Sustainable Mining (TSM) verification audit at the COREFCO refinery that validated the refinery’s implementation of policies and management systems that align with TSM (conducted in early 2021);
  • Remained an active upstream member of the Responsible Minerals Initiative, the Cobalt Institute, and the Nickel Institute;
  • Improved conformance with the OECD 5-Step Framework from 9/16 requirements to 11/16 requirements; and
  • Improved conformance with the Cobalt Institute’s Cobalt Industry Responsible Assessment Framework (CIRAF).

The Moa JV participates in regular due diligence assessments against customer responsible sourcing requirements.

For more information on our responsible sourcing alignment with international standards, plans and performance, please see our 2020 Responsible Production and Supply Report here.

Human Rights

Management Approach

The United Nations Guiding Principles on Business and Human Rights outlines the roles for state and business actors in the protection and respect of human rights. It also identifies “access to remedy” for anyone with a human rights complaint as a critical element for business to maintain its social licence.

Although human rights issues do not currently represent a top risk at Sherritt, they are an inherent risk to all mining and energy production sites. To manage this risk, we are aligning with international best practices and expectations regarding human rights. We developed an enterprise-wide policy that commits to uphold the Universal Declaration of Human Rights, along with other international principles.

Through a robust management system, Sherritt is committed to addressing environmental, social and governance (ESG) risks and opportunities, including human rights and, in particular, the rights of children. Sherritt has zero tolerance for the use of child or forced labour in its supply chains.

At Sherritt, remedies for complaints, up to and including potential human rights violations, are provided through the grievance mechanisms in place at the site level. Grievance mechanisms are processes to receive, acknowledge, investigate and respond to community complaints. These are valuable early-warning systems that can resolve sources of friction between stakeholders and companies, and can, over time, build trust. We have incorporated best-practice guidance from a number of sources into our Grievance Mechanism Standard to ensure it is both practical and credible.

At the Fort Site, we have a long-established informal process for responding to complaints from external parties and are in the process of finalizing the implementation of Sherritt’s Grievance Mechanism Standard. In Cuba, there is a state-run system where citizens can file complaints against an entity, organization or enterprise whose activities they feel are adversely affecting their well-being. Commissions are established to investigate grievances and develop action plans to address them. Sherritt’s management team, or that of its Cuban partners, participates in the process to address any grievances related to the company’s operations.

Our Human Rights Policy also articulates our commitment to the Convention on the Rights of the Child. Violation of children’s rights is a low risk in Canada and Cuba; however, it is an issue Sherritt takes extremely seriously and a risk that is carefully managed no matter the operating location.

Through a Conflict-Affected and High-Risk Area (CAHRA) assessment, Sherritt can confirm that its operations and mineral suppliers are not at significant risk for incidents of forced or compulsory labour. Measures are taken at the operations to comply with local human rights regulations banning forced or compulsory labour, and steps are being taken to conduct due diligence in the mineral supply chain.

Performance

Third-party Review

In 2018, the Fort Saskatchewan refinery underwent an external audit on its application of the Voluntary Principles on Security and Human Rights (VPSHRs) as well as UNICEF’s Child Rights and Security Checklist. The Fort Site has made significant advancements in implementing the VPSHRs on site since 2018. Refer to this case study for more information on the Voluntary Principles. No third-party human rights audits took place at Sherritt’s operations in 2020.

Human Rights Grievances

There were no human rights–related grievances reported by external stakeholders at any of our operating sites in 2020. Employee and labour grievances are captured under Employee Relations and Stakeholder Engagement.

Business Conduct

Management Approach

Our Purpose and Our Promises describe our guiding principles and how we expect them to be lived every day as we carry out our business. Our Business Ethics Policy provides clear guidance to our workforce on what it means to act with integrity. It covers conflicts of interest, fraud and corruption, fair dealings, protection and proper use of the company’s assets, compliance with regulatory requirements, disclosure, confidentiality, and reporting mechanisms available to employees and contractors.

As a Canadian company, we are subject to the Canadian Corruption of Foreign Public Officials Act (CFPOA), as well as anti-corruption laws in Cuba. The CFPOA prohibits Canadian business interests from making or offering improper payment of any kind to a foreign public official – or anyone acting on his or her behalf – where the ultimate purpose is to obtain or retain a business advantage.

Our Anti-Corruption Policy prohibits violation of the CFPOA and other applicable anti-corruption laws. All divisions, groups and offices must undergo anti-corruption training and log all government meetings and payments. In Canada and Cuba, governmental and commercial corruption does not present a significant risk, based on the latest Corruption Perceptions Index (CPI). Sherritt does not have production in countries with the 20 lowest rankings in the CPI.

We have also developed a process for meeting the public reporting obligations of Canada’s Extractive Sector Transparency Measures Act (ESTMA). Sherritt’s 2020 ESTMA  Annual Report is now available online. The report, which is a requirement of the Government of Canada, covers certain payments that Sherritt made to all levels of government in Canada and abroad in 2020. As Canada and Cuba are not signatories of the Extractive Industries Transparency Initiative (EITI), reference to it has been removed from this report.

Performance

Ethical Conduct

Sherritt has a Whistleblower Policy, which indicates that any person submitting a reportable concern may choose to do so anonymously and confidentially through the Whistleblower Hotline maintained by the Corporation’s designated external service provider. Reportable concerns may be submitted by any of the Corporation’s stakeholders, including employees, contractors, directors, officers, vendors and others.

In 2020, four reportable concerns were submitted through the Whistleblower system. Of the four reportable concerns, all were internally investigated and subsequently closed. The concerns were mainly related to potential conflicts of interest and/or non-compliance with policies and procedures.

Sherritt maintains mechanisms to facilitate the receipt, retention and treatment of reportable concerns and grievances.

The mechanisms are intended to cover theft, fraud, unethical behaviour and OECD Annex II Risks along the entire supply chain, including but not limited to:

  • Serious abuses associated with the extraction, transport or trade of minerals such as torture, forced labour, child labour, gross human rights violations, widespread sexual violence, war crimes, or crimes against humanity;
  • Direct or indirect support to non-state armed groups;
  • Abuses by public or private security forces;
  • Bribery and fraudulent misrepresentation of the origin of minerals;
  • Money laundering; and
  • Payment of taxes, fees and royalties due to governments.

If you have a reportable concern or grievance against Sherritt or any of its subsidiaries, you can report your issue anonymously and confidentially through the following channels maintained by the Corporation’s designated external service provider:

For concerns related to the Fort Site in Fort Saskatchewan, Alberta, please call +1-780-992-7000.

Upon commencing employment with Sherritt, all employees are required to review and sign off on their understanding and acceptance of our Business Ethics Policy.

Anti-Corruption

Sherritt’s Anti-Corruption Policy and Procedures were updated and approved by the Policy Committee in early 2021. Updated training for all current employees is currently being developed and will be rolled out in 2021. 100% of our eligible workforce was trained on the previous version of the policy by the end of 2019. In Canada, all salaried employees across all sites and divisions are required to take the training. In Cuba, only expatriate employees and a small number of Cuban nationals who work directly for Sherritt were required to take the training, given the nature of our joint venture relationships and our agreement with the state-run agency that provides our operations with workers.

Sherritt does not have production in countries with the 20 lowest rankings in the Corruption Perceptions Index.

Additional commentary on transparency reporting can be found under Community Development.