ambovy - 2016 suat stainability report · 2016. 2016 was another year of challenges and progress...
TRANSCRIPT
AmbAtovy - 2016 SuStAinAbility RepoRt
Contents
List of Acronyms .............................................................................................................................................................................................................................................4
Our Report ..........................................................................................................................................................................................................................................................6Report Profile .........................................................................................................................................................................................................................................................6Reporting Boundary .............................................................................................................................................................................................................................................6Materiality ................................................................................................................................................................................................................................................................6Scope ........................................................................................................................................................................................................................................................................6
About Forward Looking Statements ................................................................................................................................................................................................7
Message from our President .................................................................................................................................................................................................................8
About Us ..............................................................................................................................................................................................................................................................9Our Operations and Facilities ....................................................................................................................................................................................................................... 10Our Products ........................................................................................................................................................................................................................................................11
Mission, Vision, Values ........................................................................................................................................................................................................................... 12
Corporate Governance ........................................................................................................................................................................................................................... 13
Our Sustainability Commitment ....................................................................................................................................................................................................... 14
The Sustainable Development Goals .......................................................................................................................................................................................... 15
Stakeholder Engagement ..................................................................................................................................................................................................................... 16
Our Stakeholders ........................................................................................................................................................................................................................................ 18
Key Impacts, Risks and Opportunities ........................................................................................................................................................................................ 22Our Impact on Sustainability in Madagascar ........................................................................................................................................................................................... 22The Impact of Sustainability on Us ............................................................................................................................................................................................................. 23
Governance and Human Rights ...................................................................................................................................................................................................... 26Overview ............................................................................................................................................................................................................................................................... 26Compliance to External Initiatives .............................................................................................................................................................................................................. 27Business Ethics .................................................................................................................................................................................................................................................. 30Our Approach to Human Rights ................................................................................................................................................................................................................... 31
Economic Performance ......................................................................................................................................................................................................................... 34Overview ............................................................................................................................................................................................................................................................... 34Direct Economic Value Generated .............................................................................................................................................................................................................. 34Operating Costs ................................................................................................................................................................................................................................................. 35Donations ............................................................................................................................................................................................................................................................. 36Payments to the Government ....................................................................................................................................................................................................................... 37Payments to Providers of Capital ................................................................................................................................................................................................................ 37Significant Investment Agreements and Contracts .............................................................................................................................................................................. 37Community and Indirect Impact Investments .......................................................................................................................................................................................... 38Local Job Creation and Recruitment .......................................................................................................................................................................................................... 40Local Suppliers ................................................................................................................................................................................................................................................... 40
Communities and Social Relations ............................................................................................................................................................................................... 42Overview ............................................................................................................................................................................................................................................................... 42Livelihoods Development ............................................................................................................................................................................................................................... 43Community Health and Safety ...................................................................................................................................................................................................................... 43Work with Resettlement Villages ................................................................................................................................................................................................................. 47Community Engagement ................................................................................................................................................................................................................................ 49Cultural Heritage ................................................................................................................................................................................................................................................ 50
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Environment ....................................................................................................................................................................................................................................................51Overview ................................................................................................................................................................................................................................................................51Biodiversity ........................................................................................................................................................................................................................................................... 53Biodiversity Management ............................................................................................................................................................................................................................... 55Environmental Management ........................................................................................................................................................................................................................ 62
Labor .................................................................................................................................................................................................................................................................... 69Overview ............................................................................................................................................................................................................................................................... 69Workforce ............................................................................................................................................................................................................................................................. 69Labor-Management Relations ...................................................................................................................................................................................................................... 73Health and Safety ...............................................................................................................................................................................................................................................74Employee Engagement ................................................................................................................................................................................................................................... 76
Product Responsibility ............................................................................................................................................................................................................................ 78Overview ............................................................................................................................................................................................................................................................... 78Material Stewardship ...................................................................................................................................................................................................................................... 79Customer Relations, Health and Safety .................................................................................................................................................................................................... 79
Message from our Vice President of Sustainable Development ............................................................................................................................. 81
About This Report ...................................................................................................................................................................................................................................... 82Report Profile ...................................................................................................................................................................................................................................................... 82Defining Report Content ................................................................................................................................................................................................................................. 82Report Boundary ................................................................................................................................................................................................................................................ 83Data Measurement Techniques ................................................................................................................................................................................................................... 83GRI Content Index ............................................................................................................................................................................................................................................ 83
Appendix 1: Our Contributions to the Sustainable Development Goals (SDGs) ....................................................................................... 84
Appendix 2: Partnerships and Associations ........................................................................................................................................................................... 87
Appendix 3: Priority Species .............................................................................................................................................................................................................. 89
Appendix 4: GRI Content Index ....................................................................................................................................................................................................... 90
Contents 3
List of Acronyms
ABMS Ambatovy Biodiversity Management System
ADRA Adventist Development and Relief Agency
AFNOR Association Française de Normalisation
AIMS Ambatovy Incident Management System
ALBI Ambatovy Local Business Initiative
AMSA Ambatovy Minerals S.A.
BIANCO National Independent Anti-Corruption Office
BBOP Business and Biodiversity Offsets Program
BMP Biodiversity Management Plan
BNGRC National Office of Disaster Risk Management (Bureau National de Gestion des Risques et Catastrophes)
CAZ Ankeniheny-Zahamena Corridor (Couloir Ankeniheny Zahamena)
CCS Cultural and Social Centre (Toamasina)
CDI Cobalt Development Institute
CEREL Center for Ethnological and Linguistic Studies and Research
CFAM Analamay-Mantadia Forest Corridor
CI Conservation International
CLC Local Coordination Committee
CLP Classification, Labeling and Packaging
COBA Community-based Association
CPU Civil Protection Unit
CR Critically Endangered Species
CRC Convention on the Rights of the Child
CRGRI Regional Industrial Risk Management Committee
DBA Department of Animal Biology, University of Antananarivo
DMSA Dynatec Madagascar S.A.
DREEF Regional Directorate of Environment, Ecology and Forests
EFA Ezaka Fampandrosoana any Ambanivohitra
EITI Extractive Industries Transparency Initiative
EN Endangered Species
EPFI Equator Principles Financial Institution
ERT Emergency Response Team
ESIA Environmental and Social Impact Assessment
ESU Evolutionary Significant Unit
FIMIAM Fikambanambe Mivondrona Ampitambe Mahatsara
GEM Madagascar Business Association (Groupement des Entreprises de Madagascar)
GHG Greenhouse Gas
GIZ German Development Cooperation Agency
GJ Gigajoules
GRI Global Reporting Initiative
Ha Hectare(s)
HIA Health Impact Assessment
HIV/AIDS Human Immunodeficiency Virus / Acquired Immune Deficiency Syndrome
HS Health and Safety
HSE Health, Safety and Environment
ICMM International Council on Mining and Minerals
ICRC International Committee of the Red Cross
IFC International Finance Corporation
IGA Income-Generating Activity
INGO International Non-Governmental Organization
ICMAA Institute of Civilization/Museum of Art and Archeology
ISO International Organization for Standardization
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List of Acronyms
IUCN International Union for Conservation of Nature
JICA Japanese International Cooperation Agency
KPI Key Performance Indicator
Kt Kilotonne
LGIM Large Mining Investment Act (Loi sur les Grands Investissements Miniers)
LME London Metal Exchange
LPG Liquid Petroleum Gas
LTI Lost Time Injury
MDGs Millennium Development Goals
MECIE Investment and Environment Compatibility Regulation (Mise en Compatibilité des Investissements avec
l’Environnement)
MP Management Plan
MW Megawatt
MWh Megawatt-hours
NI Nickel Institute
NGO Non-Governmental Organization
OCHA Office for the Coordination of Humanitarian Affairs
OHCHR Office of the UN High Commissioner for Human Rights
ONE National Office for the Environment (Office National pour l’Environnement)
OPP Ore Preparation Plant
PAP People Affected by the Project
PPI Intervention Preparedness Plans
Q & A Questions and Answers
QAQC Quality Assurance Quality Control
QMS Quality Management System
REACH Registration, Evaluation, Authorization and Restriction of Chemical Substances
SCC Scientific Consultative Committee
SCM Supply Chain Management
SCS Construction and Service Society
SDGs Sustainable Development Goals
SDS Safety Data Sheet
SFCG Search for Common Ground
SIF Social Investment Fund
SIM Madagascar Industries Union (Syndicat des Industries à Madagascar)
SOC Species of Concern
SOP Standard Operating Procedure
SPI Significant Potential Incident
STI Sexually Transmitted Infection
TMF Tailings Management Facility
TSM Towards Sustainable Mining
UDHR Universal Declaration of Human Rights
UN United Nations
UNAIDS Joint United Nations Programme on HIV/AIDS
UNICEF United Nations Children’s Fund
VSLA Village Savings and Loans Association
VPSHR Voluntary Principles on Security and Human Rights
WED World Environment Day
WHO World Health Organization
WUA Water Users Association
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Our Report
Report ProfileFor the seventh year in a row, Ambatovy is publishing our annual Sustainability Report. Like last year, this report was guided
by the Global Reporting Initiative (GRI), G4 Core reporting requirements; for next year’s report, we expect to start the transition
from G4 to the new GRI Standards. The GRI Content Index is found at the back of this report and more information about the
GRI’s Sustainability Reporting Standards can be found on the GRI web-site www.globalreporting.org.
This Sustainability Report provides information on Ambatovy’s sustainability performance during the past year and focuses on
key areas of interest for Ambatovy’s stakeholders. Our previous report covered 2015 and this current one has been updated
with data relevant to 2016. The scope of the 2016 report has been widened to bring our report further in line with GRI G4
reporting expectations.
Reporting BoundaryUnless otherwise noted, Ambatovy’s seventh Sustainability Report discloses material information for the calendar year 2016
(January 1-December 31).
MaterialityOur report addresses a wide range of economic, social and environmental issues that Ambatovy considers to be of material
importance, as this term is used in the GRI guidance on materiality and completeness. The GRI guidance specifies that
sustainability reports should cover topics and indicators that reflect a company’s significant economic, social and environmental
impacts or that would substantively influence the assessments and decisions of stakeholders.
ScopeThis report includes information about our operations (located fully in Madagascar), covers Ambatovy and the departments and
initiatives directly under our control, and is based on data from internal sources.
For more information, please visit Ambatovy at www.ambatovy.com or email us at [email protected].
*Note: All monetary values in the report are $ US Dollars unless otherwise noted.
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About Forward Looking Statements
This document contains certain forward-looking statements within the meaning of applicable securities laws. Often, but not
always, forward-looking statements can be identified by the use of forward-looking words like “plans”, “targets”, “expects” or
“does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipated” or “does not anticipate”
or variations of such words and phrases and statements that certain actions, events or results “may”, “could”, “might”, or “will be
taken”, “occur”, or “be achieved”. There can be no assurance that such forward-looking information will prove to be accurate.
Forward-looking information is based on the opinions and estimates as of the date such information is provided and is subject
to known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from
those expressed or implied by such forward-looking information. Key factors that may result in material differences between
actual results and developments and those contemplated by this document include business, economic and political conditions
in Madagascar. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking
information contained in this document is made as of the date hereof and Ambatovy undertakes no obligation to update publicly
or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required
by applicable securities laws. The forward-looking information contained herein is expressly qualified in its entirety by this
cautionary statement.
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Message from our President
Dear Reader,
In these pages, you will find details regarding Ambatovy’s operations, social
and environmental interventions, challenges and achievements for the year
2016. 2016 was another year of challenges and progress for Ambatovy as the
company, like the rest of the world, continued to struggle with a bottoming nickel
price and foundering commodities market. While nickel miners around the world
were halting operations or focusing on cost cutting, Ambatovy continued to push
forward towards full production capacity while challenging ourselves to be in the
lowest cost quartile of global nickel producers. This included seeking new ways
to reduce expenditures while maintaining our progressive momentum, quality
and, above all, safety.
After identifying the areas of improvement from 2015’s safety performance,
our operation took a new approach to ensuring safety and promoting a safety
culture that is imbedded in our daily employees’ duties and actions. Safety
interactions, Leadership in the Field and the identification of Significant Potential
Incidents, all discussed in detail in this report, are initiatives that helped us instill
safety into the core of all of our tasks. Our enforced safety focus stretches from
our management to our employees, including our contractors, and in September
2016 we were proud to celebrate one year without a Lost Time Injury, an accomplishment that we saw as proof that our
enhanced emphasis on safety and the increase in safety interactions between supervisors and their teams were paying off.
2016 was also a year of ensuring the sustainability of our existing social and environmental projects and investments. This
was particularly true in our relocation village of Vohitrambato where we continued to ensure the viability of income-generating
activities, supported by Ambatovy, that have been adopted by the local villagers. We worked directly with village associations
in identifying ways to enhance the success of food crops and poultry breeding, and, in some cases, determining new activities
where the originals had achieved less than the desired results. We also worked to connect our villages with possible business
opportunities and saw the realization of a partnership between Homeopharma, a manufacturer of homeopathic products in
Madagascar, and one of our village associations for the production of noni.
As 2017 comes into full swing, Ambatovy is continuing to reach for our full production capacity in an effort not only to realize
our potential, but also to contribute to realizing our cost-savings initiatives. In spite of dealing with the continuing nickel woes
and a pessimistic view of the short-term metals market, our focus has not shifted: we remain committed to the success of our
operations as well as our initiatives in environmental stewardship, social support, and the sustainability of our investments. This
2016 Sustainability Report, our 7th to be published, highlights those activities we undertook, the challenges we faced, and the
commitments we made as a nickel and cobalt mining and processing company as well as a full member of our community and
partner of our host country. I am confident that with the gains made in 2016, Ambatovy is well on our way to accomplishing our
vision of being recognized as the world’s most successful nickel laterite operation.
Sincerely,
Tim Dobson
President
“Ambatovy is well on our way to accomplishing
our vision of being recognized as the world’s
most successful nickel laterite operation.”
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About Us
Ambatovy is a large-scale nickel and cobalt mining enterprise in Madagascar, comprised of a lateritic mine near Moramanga
and a processing plant in Toamasina. The two sites are linked by a pipeline of approximately 220 km in length. An auxiliary
office in Antananarivo provides administrative, legal, and communications support to both locations and serves as a liaison with
government offices and international organizations as well as the media and business sectors.
Our main outputs are nickel and cobalt, produced in briquette and powdered form. We also produce fertilizer grade ammonium-
sulphate as a bi-product of our refining process.
Quick FactsOperational Lifespan:
Approximately 27 years
Annual Design Capacity:
60,000 tonnes of refined nickel, 5,600 tonnes of refined cobalt, and 210,000 tonnes of ammonium sulphate
Number of Employees:
Approximately 8,000 direct employees and subcontractors; 90% of whom are Malagasy
Environment and Biodiversity:
2,154 hectares (ha) mine footprint (mine area + buffer zone) over the life of the mine, more than 14,000 ha of
offsets, or “like for like”
Locations:
Ambatovy is located in central and eastern Madagascar
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About Us
Our Operations and FacilitiesMine SiteOur Mine Site is located near the town of Moramanga, in the Alaotra Mangoro Region, 80 km east of Madagascar’s capital. The
ore body at the mine consists of two lateritic nickel deposits: the Ambatovy and the Analamay deposits, with a total footprint
of 2,154 ha, including our actual mine area of 1,616 ha and a buffer zone. Ore is surface-mined and turned into slurry for
transportation to the Plant Site via a pipeline. The Mine lies at the southern end of the eastern rainforest. The partially degraded
forests around the mine have undergone considerable human-induced pressures, including hunting and gathering, selective
logging, slash-and-burn agriculture, uncontrolled fires, and species collection for trade and consumption.
PipelineAmbatovy’s pipeline, which is approximately 220 km, runs from the Mine to the Plant Site in Toamasina. The route selected for
the pipeline makes some significant deviations to avoid sensitive environmental areas, cultural sites, and local populations. It is
buried for the majority of its route, avoiding critical wildlife habitats and residual forest fragments. Deep rooting vegetation was
planted along the length of the pipeline to stabilize steep slopes, prevent erosion, and assist in rehabilitation.
Plant SiteAmbatovy’s main operations are located at our Plant Site, approximately 10 km south of the Port of Toamasina, in the
Atsinanana Region. It is an industrial complex covering more than 320 ha. The facility was designed and built to operate in
accordance with Malagasy regulations and the International Finance Corporation’s (IFC) Performance Standards. The site’s
main components include a pressure acid leaching area, a refinery, and a utilities area to support the process. Site facilities also
include a medical clinic, a training center, several canteens, warehouses, workshops, a laboratory, offices, and living quarters.
Tailings Management FacilityAmbatovy’s Tailings Management Facility (TMF) is located approximately 10 km west of the Plant Site and will be constructed
over the life of the project in three phases, with the continuous raising of the perimeter dams to meet our tailings containment
needs. Phase II was completed during 2015 and Phase III commenced in 2016. The tailings – residue with no commercial value
left over after mining, processing, and refining – are neutralized and pumped from the Plant Site through a 15 km pipeline to the
Tailings Site, a secure, stabilized area where the treated residue is deposited for permanent safekeeping. Excess water from
the Tailings is discharged into the ocean through a 1.5 km diffuser system designed to minimize localized impacts. A portion of
this water is available to be reused at the Plant Site. When the Tailings Site has been filled, it will be reclaimed and drainage
systems will be re-established. Ambatovy’s TMF was built to specifications consistent with the requirements of the IFC and the
site was chosen for its relatively low environmental sensitivity.
Support FacilitiesAmbatovy also has support facilities located near the Plant Site, including the port, railway, road, ammonia storage tanks and
marine outfall. Ambatovy installed a substantial extension of Pier B at the Port of Toamasina, which included a new fuel terminal,
as well as equipment for handling the importation of bulk raw materials such as limestone, coal, sulphur and ammonia. We
also installed a 12 km railway and financed the upgrade of an 11 km road linking the port to the Plant Site. Ambatovy imports
ammonia and stores it, first at a large storage tank located four kms north of the Plant Site, and then at the Plant Site’s ammonia
storage tanks. The marine outfall is a 1.53 km pipeline that was installed within a rock-filled breakwater structure in January
2011. It is used to dispose of excess reclaimed water from the TMF.
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About Us
Our ProductsAmbatovy uses a hydrometallurgical process developed by Sherritt International Corporation to produce finished nickel, cobalt,
and ammonium sulphate. We supply a global portfolio of industrial customers located primarily in Asia, Europe, and the United
States. Our products are primarily used as inputs for the production of stainless steel, chemicals for the manufacture of battery
products, special alloys for turbine components, and other industrial products.
Nickel The majority of nickel produced worldwide goes into the manufacturing of stainless steel. Nickel is often also combined with
other metals to create super alloys. It is found throughout our modern environment, from jewelry and silverware, to rechargeable
battery systems for hybrid and electric vehicles, cell phones and other portable electronics and devices, and in jet turbines and
other high-end and high performance applications. Ambatovy produces Class I nickel briquettes of minimum 99.8% purity for
the world market and Ambatovy nickel is a registered brand on the London Metal Exchange (LME). In 2016, we produced and
packaged 42,081 tonnes of nickel.
Cobalt Cobalt has been used for centuries to add vivid blues to glass, glazes and pottery. In modern times, it is used in hundreds of
chemical, metallurgical, and industrial products and is an indispensable component of rechargeable batteries used in a variety of
devices including cellphones and tablets, power tools and other portable devices, as well as in hybrid and electric vehicles and
other technologies. Ambatovy produces cobalt that is of minimum 99.8% purity. It is sold in briquette and in powdered form. In
2016, we produced and packaged 3,252 tonnes of cobalt.
Ammonium sulphateAs a by-product of the hydrometallurgical process, Ambatovy also produces ammonium sulphate, an inorganic, highly water-
soluble salt. Ammonium sulphate is an excellent crop fertilizer when it is used as part of a complete agronomic improvement
plan. Ambatovy’s ammonium sulphate is produced in crystallized granules and is sold mainly on the international market. In
2016, we produced 134,769 tonnes of ammonium sulphatee.
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Mission, Vision, Values
Our MissionTo be a leader in the sustainable production of high quality nickel and cobalt for the global market
Our VisionThrough a committed and engaged workforce, we will deliver world-class results in:
• Safety
• Environmental Stewardship
• Social Performance
• Product Quality
• Production
• Cost Efficiency
Our ValuesOur core values include an overriding commitment to:
• Respect for people
• Responsibility
• Integrity
• Excellence
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Corporate Governance
Ambatovy is an enterprise held by three shareholders: Sherrit International Corporation (our operator), Sumitomo Corporation, and Korean Resources Corporation. All three partners are fully committed to transparent, sustainable and responsible business practices.
Ambatovy is comprised of two companies: Ambatovy Minerals S.A. (AMSA) and Dynatec Madagascar S.A. (DMSA), which, together, are responsible for day-to-day operations. AMSA operates the Mine Site and pipeline, and DMSA manages the Plant Site and all the activities related to it. Both AMSA and DMSA are subject to the laws of Madagascar, and each has a board of directors. In practice, AMSA and DMSA act in parallel under the purview of Ambatovy’s Executive Committee, which consists of members from each of the three partner companies:
At the end of 2016, the Executive Committee was comprised of eight individual voting members who are responsible for overseeing the direction and execution of Ambatovy’s activities. The Committee meets at least quarterly or as circumstances require, providing appropriate governance of the Company.
In addition to the Executive Committee, there are three sub-committees whose members are also employees of each of our partners:
• Audit
• Environment, Health and Safety, Security and Community
• Marketing
40%
32.5%
27.5%
Sherritt International Corporation (operator, publicly traded, TSX:S) 40% ownership
Sumitomo Corporation(publicly traded,TSE: 8053) 32.5% ownership
Korea Resources Corporation, KORES(government-owned corporation) 27.5% ownership
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Our Sustainability Commitment
Ambatovy believes that our long term sustainability is directly linked to the quality of our relationships with our stakeholders,
along with our resilience to external and internal crises and our ability to weather negative cycles within the mining industry.
In the conduct of our business, we are committed to engaging with our stakeholders and winning their support by operating
ethically, creating a rewarding workplace, demonstrating environmental excellence and submitting to external controls.
To meet this commitment Ambatovy will:
• effectively engage stakeholders,
• demonstrate strong governance,
• comply with national environmental regulations and international standards,
• ensure external controls of our activities, and
• create a rewarding workplace.
This commitment is not only internalized within Ambatovy’s activities but is also expected of our suppliers and contractors. In
this way, we hope to further increase the positive impact we have on our host country and extend our best practices across the
industry.
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The Sustainable Development Goals
The United Nations’ Sustainable Development Goals
(SDGs), a follow up to the Millennium Development
Goals (MDGs), consist of 17 ambitious targets to
address global issues and to ensure a sustainable
and resilient future for the world by 2030. The
success of the SDGs depends on the participation
of a range of actors – governments, corporations,
communities and non-governmental organizations.
The nature of the work of the natural resources sector
has economic, social and environmental impacts on
the jurisdictions where projects and operations are located. As a responsible company working in both a biological hotspot and
a nation afflicted with extreme poverty, we aim to ensure that the potential negative impacts of our activities are minimized and
mitigated to the greatest extent possible, while also focusing on actions that positively impact our local communities and the
country at large.
To this end, the SDGs serve as a reference for us to gauge how and to what extent we are contributing to Madagascar’s
development and to its achievement of these globally recognized sustainability targets.
As outlined in Appendix 1 and as described throughout the text of this report, there are several ways that Ambatovy supports
and contributes to the SDGs, particularly through our overall business approach, through our extensive investments in social
and environmental activities, and through our commitment to supporting the growth of Malagasy industry and to promoting small
businesses.
For example, by choosing to process our raw ore and refine our products on-site, Ambatovy generates important economic and
social benefits for the country. We contribute substantially to Madagascar’s economic development by increasing the country’s
foreign earnings, by creating many more jobs than if we had just operated the Mine, and by contracting with hundredss of
local businesses to provide the goods and services we need. We are an equal opportunity employer, providing employment
opportunities for women in a typically male-dominated industry, and offering training opportunities for all our workers. Our strong
stance against corruption and for workplace safety extends to our contractors and our suppliers as well.
We view ourselves as a member of our host communities. As such, we have invested extensively in social infrastructure
and institutions: building roads, rehabilitating schools and health centers, and supporting capacity building in areas such as
financial management, reproductive health, and improved agricultural techniques. Ambatovy’s participation in the Business
and Biodiversity Offsets Program (BBOP) reflects our commitment to the environment, and we work closely with our local
communities to encourage the sustainable use of ecosystem services and to educate the youth on the importance that
Madagascar’s rich biodiversity has to play in their, and the country’s, future.
At the heart of the Ambatovy Local Business Initiative (ALBI) is Ambatovy’s “buy locally, hire locally” policy. From support and
training for small businesses, to assistance in the development of local suppliers able to produce high-quality industrial products
and supplies, as well as businesses able to recycle industrial and domestic waste, we understand our role in driving the local
economy forward in its development. With more than $ 3.3 billion US in local purchasing since our start in 2011, approximately
860 suppliers and contractors currently provide Ambatovy with goods and services across 40 sectors of business. These
suppliers and contractors are subject to the same environmental, health and safety, and work standards that are applied to our
own sites. They also receive training on these standards and obtain general capacity building support. Preparing Madagascar’s
local industry for the arrival of other international companies and providing experience to be able to meet international standards
and quality expectations is our way of ensuring the viability of local enterprises.
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Stakeholder Engagement
Ambatovy has a responsibility and a commitment to engage internal and external stakeholders who are directly or indirectly
affected by the company, as well as those who may have interests in the company and/or the ability to influence matters,
either positively or negatively. Our stakeholders include locally affected communities; national, regional and local government
authorities; the press; civil society organizations; the international community; shareholders and lenders; our employees;
and the private sector. Identifying and understanding who our stakeholders are is an important part of our work. Stakeholder
influence can vary, from minor to significant, and this influence may change over the course of the different phases of our
operations.
The purpose of our stakeholder engagement is fourfold:
• To establish and maintain productive relationships with our stakeholders and to maximize the shared benefits of our activities;
• To contribute to Ambatovy being a successful, resilient and sustainable company;
• To enhance and strengthen our reputation, both domestically and internationally;
• To maintain both our regulatory and social licenses to operate in Madagascar.
We recognize that effective stakeholder engagement is critical for establishing mutual understanding of one another’s needs,
interests, aspirations and concerns, for making decisions to support business objectives related to growth, risk management and
operational excellence, and for collaborating to address local stakeholder priorities.
We take a thoughtful, sincere and ethical approach to engaging stakeholders and catalyzing the development of sustainable
communities. We recognize that a significant part of our role is to help build human and institutional capacity wherever we
operate so that local communities can achieve their development goals.
For Ambatovy, stakeholder engagement is an ongoing process, encompasses a range of activities and approaches, and
will span the entire life of the mine. Like other Ambatovy business functions, our stakeholder engagement needs to be well
managed. It is guided by a well-defined strategy with clear objectives, priorities, methods for engagement, concrete activities
and assigned responsibilities. Our approach is systematic (rather than ad-hoc) so that we can track and manage stakeholder
issues and risks more effectively.
Stakeholder engagement entails building robust, productive relationships through communication, consultations, ongoing
dialogue and working partnerships. We want our stakeholders to understand why and how we operate. We especially want input
from relevant stakeholders when a particular aspect of our operations directly affects them.
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Stakeholder Engagement
Our stakeholder engagement is guided by the following principles:
• Through our actions and behaviors, Ambatovy actively strives to earn the respect, trust and cooperation of all stakeholders.
We create and maintain relationships that are inclusive, honest, transparent and mutually beneficial. These relationships are
a tangible, valuable asset and integral to the company’s business outcomes.
• Ambatovy is committed to sustainable development, i.e. meeting the needs of the present without compromising the ability
of future generations to meet their own needs. As such, Ambatovy creates long-term value and benefits for our stakeholders
while seeking to understand and respond to their issues and interests.
• Ambatovy recognizes that we need to be accountable for our actions and impacts. If our operations are not managed
appropriately, they have the potential to impact local communities and the environment negatively. Thus, the company
attempts to minimize the impact of our operations by operating our facilities to the appropriate industry and international
standards, and by working collaboratively with stakeholders to identify and mitigate negative impacts.
• All Ambatovy employees and contractors have a responsibility to conduct meaningful stakeholder engagement as
“ambassadors” for the company. Ambatovy understands that to achieve success in stakeholder engagement, we must
integrate the principles of stakeholder engagement within all aspects of our business.
Ambatovy’s stakeholders are identified as those who have been directly or indirectly impacted by our activities, who have an interest in the company and/or who have an ability to influence matters, be it positively or negatively. Through our stakeholder identification process, we have identified 10 groups of national and international stakeholders:
• Malagasy Government and Regulatory Bodies
• Regional and Local Authorities
• International Community
• Civil Society Organizations and Local Non-Governmental Organizations (NGOs)
• Local Communities and People Affected by the Project (PAPs)
• Malagasy General Public
• Press and Media
• Private Sector/Business Community
• Our Employees and Contractors
• Our Shareholders and Lenders
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Our Stakeholders
Malagasy Government and Regulatory BodiesAmbatovy strives to have an open and transparent relationship with the Government of Madagascar at all levels as well as with
regulatory bodies that are authorized to oversee our operations. This transparency is achieved through ongoing engagement
and reporting that frequently go beyond what Ambatovy’s legal obligations require. We meet with relevant ministries and
authorities at national, regional, and local levels and often host members of these institutions for site visits to help them better
understand Ambatovy’s operations, approaches and challenges. In 2016, Ambatovy engaged with government officials on a
wide range of important matters. We also had extensive engagement with government officials to review progress on activities
supported through the Social Investment Fund (SIF) and, in some instances, to inaugurate completed projects. Ambatovy
participated at the Donors’ and Investors’ Conference in Paris that the Government of Madagascar organized in early December
2016. Ambatovy representatives participated in panel discussions on the mining sector and on biodiversity, and had the
opportunity to engage with government officials, donor representatives and other private sector groups. As in previous years,
we continue to work closely with the ONE (National Office for the Environment) with regards to our environmental and social
commitments.
Regional and Local AuthoritiesAs with counterparts on the national level, Ambatovy collaborates with regional and local authorities in many aspects of our
operations. In order to encourage transparency through continuous and open communication, Ambatovy regularly offers
informational visits and tours to regional and local authorities. During 2016, we worked closely with them to discuss the progress
of projects supported through the SIF and to identify a series of small-scale community development activities in our areas of
intervention.
International Community Ambatovy engages with the international community in Madagascar, including embassies, UN agencies, donors and
international non-governmental organizations (INGOs). This engagement helps create and reinforce synergies between
Ambatovy and other international groups, and provides valuable opportunities to establish a climate of trust, respect and
openness, to exchange information, to develop best practices and to establish partnerships. Such partnerships are extremely
important for Ambatovy to maintain our social license to operate, to ensure that Ambatovy’s interventions are complementary
with other groups, to tap each partner’s strengths and expertise in order to have a greater and more sustainable impact, and
18
Our Stakeholders
to share experiences and lessons learned. Examples include our partnership with Search for Common Ground (SFCG), an
international NGO that is well-regarded for its work in peacebuilding and conflict transformation. A project with SFCG got
underway in 2015 and continued into 2016, and aims to enhance the capacity of Ambatovy staff and local community members
to engage in constructive, solution-oriented dialogue in order to build trust and improve mutual comprehension. Phase II of this
project was developed in the second half of 2016 and signed in early 2017; it will seek to consolidate the results from the first
phase and will expand geographically to work in areas along the pipeline and in Toamasina. Our ongoing collaboration with the
Duke Lemur Center of Duke University focusing on scientific research within our conservation zones also continued during the
year.
In November 2016, the United Nations System in Madagascar (six agencies in particular) and Ambatovy signed a Joint Declaration of Intent to develop our cooperation in areas of common interest in order to contribute to the social and economic development priorities of the Alaotra Mangoro and Atsinanana Regions and to improve the standard of living and welfare of the local population. Ambatovy has been working with different UN agencies for the past several years in the areas of good governance and human rights, child protection, education, emergency preparednessandresponse(includingforindustrialrisks),andthefightagainstHIV/AIDSintheworkplaceandsurrounding zones.
“We are very pleased with this ongoing collaboration with Ambatovy because the involvement of the private sector is essential in the sustainable development of Madagascar,” expressed the Resident Coordinator of the United Nations System in Madagascar, Mrs. Violet Kakyomya, as noted in a press release to mark the occasion.
The partnership between the United Nations System and Ambatovy will help align our work with the achievement of the Sustainable Development Goals (SDGs) in Madagascar, and will help ensure that Ambatovy’s nickel and cobaltoperationsbringsignificant,lastingandpositiveimpactstothelocalpopulations.PleaseseeAppendix1for more information about our contributions to the SDGs.
Civil Society Organizations and Local NGOsWe engage actively with civil society organizations where common interests and concerns exist, whether these are broad policy
issues with a national scope or local issues that affect communities around our operations. Consistent with our approach to all
stakeholders, we respect the views of civil society groups and seek to build dialogue in a constructive manner. We are pleased
to partner with a number of civil society organizations that collaborate with us on the implementation of programs that fulfill our
commitments to our stakeholders as well as our above-mentioned objectives. In 2016, Ambatovy continued to work closely with
the local NGO, Asity Madagascar (which is associated with BirdLife International), for our bird monitoring program and for the
management of our offset area within the Torotorofotsy Wetlands Ramsar Site. The local NGO EFA (Ezaka ho Fampandrosoana
any Ambanivohitra) provided organizational and technical support to the ten agricultural cooperatives that were created along
the pipeline, in the Districts of Brickaville and Toamasina II, in order to help improve their income-generating activities. It is also
working with us on new resettlement activities near the Mine Site (for more information on our work on resettlement activities,
please see the section on Communities and Social Relations). We also launched an important set of activities in collaboration
with Prodaire (Projet de Développement de l’Approche Intégrée pour promouvoir la Restauration Environnementale), a program
that is funded through the Japanese International Cooperation Agency (JICA), and implemented with a local NGO, Ezaka
Vaovao. These activities will contribute to the fight against the erosion and silting of the Mangoro River, from which we draw
water for our operations at the Mine Site.
Please see Appendix 2 for more information about our partnerships and associations.
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Our Stakeholders
Local Communities and People Affected by the Project (PAPs)We understand that individuals who make up our communities are the very people who can be most impacted by our activities.
They are therefore very important to us and we aim to build enduring relationships with our neighbors to make sure we manage
our operations in an open, respectful and transparent manner. The Sustainability team continues to maintain constructive
and open dialogue with various actors in the communities, ranging from traditional local authorities to representatives of the
fokontany.1 Our interactions with communities and PAPs take many forms, and community participation in the search for
solutions has made enormous progress. In 2016, we continued to have quarterly meetings with various groups, such as the
traditional local leaders known as the Tangalamena, and with the Local Coordination Committee made up of district leaders and
authorities. We worked with the members of the Resettlement Committee in Vohitrambato to organize a celebration to mark the
10th anniversary of the committee’s establishment. We also facilitated a partnership with the Malagasy company Homéopharma
to help community members gain an additional source of regular, reliable income (please see the section on Communities
and Social Relations for more information on this partnership). Our Social Agents provide a source of contact with our local
communities as they regularly visit and consult with them. Ambatovy’s Grievance Mechanism also serves as a platform through
which our communities are able to express concerns, give feedback and have their voices heard.
Malagasy General PublicAmbatovy focuses not only on local communities around our sites but also the general public in Madagascar. Every year,
thousands of people visit Ambatovy through our hosted site visits and information centers. The Ambatovy “Infovan” provides
information to our local communities through presentations and face-to-face engagements. Open Doors events are scheduled
throughout the year and allow the public to experience Ambatovy and engage in Q & A with members of Ambatovy’s
Communications team. Ambatovy also regularly participates in national and regional fairs, celebrations, and World Day events,
such as World AIDS Day, World Wetlands Day and World Lemur Day. Ambatovy’s engagement includes the national audience in
Antananarivo, and residents of the urban areas around Moramanga, Brickaville and Toamasina, as well as the rural communities
located near the Mine and along the route of our pipeline, in an effort to include all of our stakeholders in the flow of information.
Our engagement with the Malagasy general public in at least one of the above-mentioned forms takes place on a regular basis,
with larger events and presentations occurring throughout the year.
1 In Madagascar, the fokontany is a political subdivision equivalent to a village or group of villages.
World Environment Day (WED) has been celebrated on June 5th every year since 1972. For more than 40 years, it has served as a global platform to analyze the environmental protection efforts in 100 countries. The theme adopted for 2016 was “Let’s stamp out the illegal trade of our wildlife.” Ambatovy regularly participates in WED activities and, in 2016, an inter-regional awareness-building event – organized by the Ministry of Environment, Ecology and Forestry – was held near our operations. It brought together regional and national groups as well as experts involved in environmental protection, including representatives from Ambatovy. At a more local level, celebrations were held in Districts near the Mine Site. Ambatovy was involved in organizing events at both levels which gave us an opportunity to highlight our actions contributing to species preservation and environmental protection. We also set up a booth in Brickaville, along the pipeline, to welcome visitors who were eager to learn more about our environmental programs.
20
Our Stakeholders
Press and MediaWe recognize the importance of disseminating clear and timely public information about our activities. We endeavor to be open
and consistent with the media, providing accurate information both nationally and internationally. Ambatovy regularly issues
press releases and newsletters and offers site visits to journalists in order to cultivate a truthful public record of our activities.
Throughout 2016, our relationship with the media community remained pivotal and Ambatovy continued to focus on regularly
engaging media members in a transparent and professional manner. Through media briefs, press releases, and press
conferences, we ensured that the media community was well informed and up-to-date with the crisis affecting the mining
industry, challenges facing our organization, as well as our decisions, activities, and accomplishments.
Private Sector/Business CommunityAmbatovy has an extensive supply chain, and our suppliers are integral stakeholders for us. While we have a range of suppliers
around the world, Ambatovy emphasizes local procurement through the Ambatovy Local Business Initiative (ALBI) as part of our
commitment to support the Malagasy economy. ALBI sources from and offers technical support to local enterprises. This has
resulted in these enterprises supplying a range of goods and services while meeting our high standards.
We also engage regularly with the wider business community in Madagascar to discuss issues of mutual interest or concern.
We are a member of the Chamber of Mines of Madagascar as well as the Madagascar Business Association (Groupement
des Entreprises de Madagascar, GEM), and the Madagascar Industries Union (Syndicat des Industries de Madagascar, SIM).
Through our engagement with the wider business community, our goal is to contribute to promoting exchanges and learning,
strengthening the voice of the private sector, and enhancing the business climate in Madagascar. In 2016, we worked with the
Chamber of Mines on the recommendations for the revision of the mining code and on governance issues in the mining sector.
Our Employees and ContractorsAt Ambatovy, we aim to recruit national employees whenever possible and are committed to developing a skilled local
workforce. Indeed, recruiting, developing and retaining talented and motivated employees helps us to be more productive,
to deliver better business results and to be an employer of choice in Madagascar. Thousands of Malagasy employees and
contractors have received construction, technical, and administrative training. Investing in such training provides them with the
skills required to assume roles with increasing responsibility during the life of our operations. Moreover, the partnerships we
maintain with local technical schools ensure capacity building for our workforce and the local population.
In 2016, Ambatovy continued to promote site visits for employees’ families in order to inform them about Ambatovy and give
them an opportunity to learn more about our operations, approaches and activities. We also continued to focus on increasing
the flow of communication and the creation of dialogue between the management team and our employees through the
Intranet. With the availability of computers for all our employees at our sites, the Intranet has proven to be an invaluable tool
in dispensing information and encouraging communication between the different management levels. The Intranet allows
employees to receive immediate and updated information on the company’s activities and decisions, thus helping to combat
rumors and possible uncertainty. It also serves as an information database where employees are able to access information,
documents and forms they may find necessary for their work.
Our Shareholders and LendersOur shareholders and lenders play an integral role in supporting our operations. In 2007, Ambatovy partners reached a financing
agreement with a consortium of 14 lending institutions.2 This consortium is comprised of government-sponsored export credit
agencies, international development banks, and commercial banks from around the world. We report regularly to the lenders on
a wide range of sustainability issues and we communicate through our partner companies to financial and industry analysts who
assess commodity markets.
2 Ambatovy received $ 2.1 billion US in financing from this consortium. For a complete list of these 14 lending institutions, please see www.ambatovy.com.
21
Key Impacts, Risks and Opportunities
Our Impact on Sustainability in MadagascarWe have always understood that in order to work in Madagascar, we must be mindful of the unique economic, social and
environmental context of the island. Many of the impacts related to our activities are positive, such as the creation of jobs,
contributions to the local economy and improved industrial capacity in the country. However, it is necessary to be aware of not
only our positive impacts but also any potential or actual negative ones, so that we can develop and implement strategies to
minimize, manage, and remediate them.
We are aware that we are working in a country that has high biodiversity and that faces challenging socio-economic issues. If
we do not carefully manage our activities, there are risks that we may negatively affect the delicate ecosystem surrounding our
activities and exacerbate the poverty that already exists in Madagascar. These risks were carefully considered before we even
broke ground and we continue to assess risks and impacts as they arise. Each year we identify sustainability-related impacts
and opportunities and work to ensure that these impacts are minimized to the extent possible. While each challenge is weighed
from within its specific context, in general, we prioritize them based on impacts on stakeholders and the environment, as well as
on our ability to operate safely and efficiently.
EconomicOne of our greatest sustainability impacts in economic terms relates to how we manage our presence in the local economy.
Negative impacts include price inflation as people move into the communities surrounding our operations looking for economic
opportunities. However, these are more than compensated globally by the potential for extensive positive financial benefits
for the communities through wages and supply contracts. There is also the potential to improve capacity to deliver goods
and services of international quality. Through ALBI, we work to maximize these positive impacts through targeted programs
to increase local supply, local employment and training to support income generation for community members (for more
information on ALBI, please see the section on Economic Performance.
SocialAvoiding, minimizing, and mitigating negative social impacts have been a key focus for the last few years. Our goal is to be
fully compliant with both Madagascar’s national regulations and the IFC Performance Standards. An important focus in 2016
related to our work in resettlement villages and with livelihood restoration, particularly providing technical support to PAPs
for rice fields that had been damaged during the construction phase. In addition, in 2016 Ambatovy continued to support the
Regional Committee for Disaster Risk Management and its sub-committee for the management of industrial risks. An awareness
campaign with families living near the TMF focused on the risks of dam failure and on safety measures to be carried out in the
event there is an accident.
22
Key Impacts, Risks and Opportunities
EnvironmentalWe are operating in an environmentally sensitive area. Protecting the biodiversity around the Mine has been a key issue since
the early planning stages. We have an opportunity to make improvements through our biodiversity and offsets management
program. Ambatovy’s environmental offset program is based on the Business and Biodiversity Offsets Program (BBOP),
for which Ambatovy is a pilot project (please see the section on Environment for more on this initiative). Moreover, local
communities have been incorporated into our environmental management and stewardship activities to preserve the long term
sustainability of Madagascar’s diverse flora and fauna.
The Impact of Sustainability on UsMany of the sustainability challenges for our stakeholders are the same issues we face as an organization. As Ambatovy begins
to run closer to full production capacity, our focus is shifting from establishing our presence in our host country and communities,
to maintaining the sustainability of our actions and investments.
LaborFinding highly skilled employees for jobs that require a specific set of skills continues to be a challenge in Madagascar.
Ambatovy has continued to invest in our internal training through SkillMine, a training program that combines classroom,
computer, and on the job training to individuals interested in expanding their skill base.
EconomicThe recent global economic crisis has spared no company, including Ambatovy. For the past few years, the price of nickel has
stayed very low. It started at $ 4.00 US per pound at the beginning of 2016 to reach a low point of $ 3.43 US per pound and
then experienced a slight increase during the fourth quarter to end the year at $ 4.56 US per pound. To ensure our continued
existence, Ambatovy pursued our cost reduction efforts in 2016.
23
Key Impacts, Risks and Opportunities
Governance and SocialMadagascar is a country with governance concerns, high rates of poverty, and the potential for community-company conflict.
These are all risks that could significantly impact our business and reputation. In order to mitigate these risks, we commit to
conducting all activities with integrity and the highest standards of responsible conduct. This includes avoiding actual and
perceived conflicts of interest, having zero tolerance for corruption of any form, and respecting the rights of all people with whom
we interact. We do this by vigorously implementing our Business Ethics Code, Anti-Corruption Policy and Human Rights Policy.
We strive to be as transparent as possible and take an active part in the Extractive Industries Transparency Initiative (EITI)
process in Madagascar which includes disclosure of our financial and operational information to the public, as required under
the EITI standard. By implementing the Voluntary Principles on Security and Human Rights (VPSHR), we are also able to align
our policies and security operations with the highest international standard for security and human rights.
In a country with significant poverty and social needs, great expectations can be placed on large foreign companies to solve
many, if not all, of the area’s inherent socio-economic challenges. Indeed now, more than ever, stakeholders – from local
communities and civil society organizations to regional authorities and the national government – expect to experience tangible
benefits and improvements in their standard of living from natural resource extraction and processing.
Managing the expectations of our stakeholders is therefore paramount, especially as we struggle with the low commodity price
environment. We are committed to helping improve the lives of people near our operations, but we rely on our host government
to fulfill its obligations regarding basic services, particularly in the areas of health, education and infrastructure. Moreover,
Ambatovy seeks to establish partnerships with other groups in a manner that taps each partner’s strengths so as to address
stakeholder issues and opportunities and to have a greater and more sustainable impact, but that does not substitute for the
government, does not foster dependency, and does not create unrealistic expectations of what we can do.
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Key Impacts, Risks and Opportunities
EnvironmentOperating in a highly sensitive ecosystem obligates us, as a socially-responsible member of our community, to design and
implement extensive avoidance, mitigation and conservation measures to ensure that we continue to minimize our impact.
Ambatovy has devoted considerable time and resources to ensuring these measures are instilled within our operational
processes and scope.
We are also obliged under the laws of Madagascar and our financing agreements to meet stringent environmental criteria. Aside
from those obligations, we have committed ourselves to multiple voluntary compliance and monitoring programs, such as the
Business and Biodiversity Offsets Program. Compliance with these criteria requires a substantial financial commitment on our
part, but we have carefully budgeted funds to ensure that we meet or exceed the targets set for us.
__________________________________________________
Governance of sustainability-related risk management is the responsibility of the Executive Committee and the Environment,
Health and Safety, Security and Community sub-committee. This sub-committee meets quarterly to discuss issues that have
arisen over the period and to authorize any significant changes to our plans and management strategies. We remain committed
to managing these impacts, risks and opportunities. While there are areas for improvement and challenges that lie ahead, we
are proud of our accomplishments in 2016.
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Governance and Human Rights
GOVERNANCE AND HUMAN RIGHTS GOALS 2016 RESULTS
Promote the Voluntary Principles on Security
and Human Rights (VPSHR)
Ambatovy participated in a new project led by the international NGO Search for
Common Ground and funded by the British Embassy to promote the Voluntary
Principles on Security and Human Rights as well as the Guiding Principles on
Business and Human Rights. We presented our work in these areas at high-level
round table discussions attended by representatives of the Ministries of Mines
and Interior and Decentralization, as well as the British and US Embassies.
Ensure employees and suppliers comply
with ethical standards required by Ambatovy
Ambatovy began rolling out anti-corruption training to all employees in October
2015 and by the end of that year, 48% had completed the training, with the
remainder completing it over the course of 2016. This training is now included
in the onboarding process for new employees. A refresher training of the policy
was provided to 65% of Ambatovy employees in 2016. Over the past few years,
we have also rolled out a Training of Trainers program for suppliers to increase
their awareness of the requirements of the anti-corruption policy. 274 contract
workers from more than 100 supplier companies have received anti-corruption
training and more than 8,600 contractors’ employees were then trained, in turn,
by these new trainers.
Promote good governance of mining
royalties within Madagascar
The work of the Tsara Tantana (Good Governance) Project advanced further in
2016. The Project aims to promote the transparent, equitable and sustainable
distribution and management of mining royalties paid to decentralized territorial
collectivities in Madagascar. Under the guidance of the Project’s Steering Committee, a proposed mechanism has been developed and a draft decree has
been prepared; they are currently under review by the Government.
OverviewOur commitment to working with integrity, transparency, respect and the highest ethical standards provides the framework
to ensure that Ambatovy is an organization that respects our communities, our partners, and our employees. Ambatovy is
committed to taking into consideration the interests of our stakeholders in our decision making, and to respecting culture,
customs, values and human rights in our interactions with all those affected by our activities.
We hold all employees, regardless of their position, responsible for respecting both their fellow employees and the communities
around our operations. We also expect that the companies with which we work maintain the same level of ethical behavior. Our
suppliers and contractors are required to sign a Supplier Code of Conduct and to fulfill certain labor requirements if they wish
to do business with us. Our Supply Chain Management (SCM) is responsible for educating our suppliers and ensuring their
compliance with our standards.
26
Governance and Human Rights
Our employees and community members have access to the Ambatovy Grievance Management System if they have
experienced or witnessed unethical behavior. We are committed to investigating any violations and ultimately aim to prevent
such violations before they take place by informing our employees and key stakeholders of our expectations of respect and
integrity.
Ambatovy has been engaged in the Tsara Tantana (Good Governance) Project since 2014. The goal of the Project is to make
recommendations for developing a mechanism to ensure a safe, effective, transparent and sustainable royalty distribution at the
community level, as required by the Malagasy law for large mining investments. The Project is guided by a Steering Committee
with representatives from the Ministries of Finance and Budget, Mines and Petroleum, and Interior and Decentralization, as well
as the Presidency, the Prime Minister’s Office, the Chamber of Mines, the Extractives Industry Transparency Initiative (EITI) in
Madagascar, and Ambatovy.
Since the Project’s inception, multiple meetings with key government representatives, donors, and civil society groups, as well
as consultations and workshops in the field with local authorities, traditional leaders, community members, etc., have been
held in order to get feedback and input and to understand the key concerns and aspirations of our multiple stakeholder groups.
This work has led to the drafting of a proposed mechanism that would manage incoming royalties for community development
activities, joint infrastructure projects at the inter-communal level (such as hospitals and technical schools), and investments
for future generations, beyond the life of the mine. The proposal has generated much interest from all parties and work on the
mechanism continued throughout 2016. A sub-committee of legal experts from the three concerned ministries prepared a draft
decree for encoding the mechanism into law; the draft is still under review. Discussions are also underway with international
partners and local NGOs, such as the United Nations Development Programme (UNDP), the GIZ’s program on decentralization
and local development (German Development Cooperation Agency), and Transparency International, about the possibility
of accompanying the future recipient communes and providing them with capacity building support through their respective
governance projects on issues related to participatory budgeting, social accountability, inclusive decision-making, priority setting,
negotiations, etc. This project illustrates how Ambatovy is fostering discussions about transparency, accountability, equity and
sustainability in our role as a major economic player in the country.
Compliance to External Initiatives Ambatovy strives to maintain the highest ethical standards, to respect local culture and traditions, and to comply with the laws
and regulations of Madagascar. We endeavor to meet and, when possible, exceed the mandatory and voluntary compliance
requirements of our agreements with our lenders, the Government of Madagascar and other stakeholders.
Mandatory ComplianceInternational Finance Corporation (IFC) Performance StandardsThe IFC is a member of the World Bank Group established to foster sustainable economic growth in developing countries by
financing private sector investment, mobilizing capital in the international financial markets and providing advisory services,
among other things, to businesses and governments. Our agreement for $ 2.1 billion US in project financing requires that we
adhere to IFC Performance Standards on environment, labor, and social aspects for a major investment project.
27
Governance and Human Rights
Investment and Environment Compatibility Regulation (Mise en Compatibilité des Investissements avec l’Environnement, MECIE)MECIE regulates environmental compliance for investment projects in Madagascar. It describes the process and conditions for
obtaining the necessary environmental permits and establishes the regulations and penalties. We received our environmental
permit from the Malagasy authorities in December 2006, six months after filing our Environmental and Social Impact
Assessment (ESIA). Following the ESIA, Ambatovy developed an Environmental Management and Social Development Plan,
which covers the following main areas and which is monitored by the ONE.
• The Environmental Management Plan and Program, which provides the framework that ensures that issues identified in the
ESIA are addressed.
• The Social Management Plan, which guides Ambatovy’s relationship with local communities.
• The Health and Safety and Emergency Response Measures, which define the conditions and manner in which work must be
carried out so that potential risks to the health and welfare of Ambatovy personnel are minimized.
Large Mining Investment Act (Loi sur les Grands Investissements Miniers, LGIM)Madagascar’s LGIM establishes the legal framework for developing and operating large-scale mining projects in the country.
The LGIM was developed with the support and assistance of the World Bank. Under the LGIM, we are required to report
annually to the government on a range of sustainability issues, such as local employment and environment measures.
Ambatovy was certified under the LGIM in 2007.
Equator Principles
The Equator Principles are voluntary standards for banking institutions. Since some of Ambatovy’s financing institutions are
Equator Principles Financial Institutions (EPFIs), our financing agreements require that we uphold these principles. EPFIs
pledge to take into account social and environmental criteria in the large-scale projects they finance and to abstain from
financing loans where the borrowers are not willing or able to comply with these criteria. Presented in June 2003, these
principles are consistent with the standards promoted by the IFC and form the basis of responsible financing. The Equator
Principles require an evaluation of environmental impacts of high-risk projects and, in certain cases, a management plan that
addresses socio-economic impacts, environmental protection, human rights and labor standards.
Voluntary ComplianceWith a view to achieving superior safety, environmental and social results, Ambatovy is committed to the following voluntary
measures that go beyond our legal obligations.
Business and Biodiversity Offsets Program (BBOP)BBOP is a collaboration of some 50 companies, financial institutions, governments, and civil society organizations. The
members aim to develop and test best practices for conservation and biodiversity offsets by following the mitigation hierarchy. In
2006, Ambatovy became a BBOP pilot project and we currently align our offsets vision and design with the guidelines provided
by the BBOP Secretariat and Advisory Committee.
Extractive Industries Transparency Initiative (EITI)We are committed to the transparent reporting of payments to the Government and, since Madagascar became an EITI
candidate country in February 2008, Ambatovy has been a strong supporter of the EITI process and an active member of the
Multi-Stakeholder Group (national committee), comprised of representatives from government, extractive industry companies,
and civil society. Each year, Ambatovy participates in Madagascar’s EITI reconciliation report. Throughout the period that the
country was suspended from the EITI (2011-14) and since it was readmitted as a candidate country in June 2014, the Multi-
Stakeholder Group has continued to work together to promote the process. Ambatovy remains a committed member of this
group to foster transparency with respect to taxes and other revenues derived from the extractive sector.
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Governance and Human Rights
During 2016, EITI Madagascar worked on preparing for the validation process that is expected to commence in September
2017, which will determine if Madagascar progresses from a candidate country to a compliant country. It also worked on the
report reconciling 2014 data and figures, and the preparation of the road map for the new EITI requirement about beneficial
ownership.
International Council on Mining and Metals (ICMM) The ICMM is an organization established in 2001 to act as a catalyst for performance improvement in the mining and metals
industry. The ICMM brings together mining and metals companies with national and regional mining associations and global
commodity associations. Ambatovy endeavors to apply relevant ICMM principles and has integrated them, where applicable,
into internal planning and strategies.
International Standard ISO 9001In 2014, we received our ISO certification for Refining, Analytical Services and Shipping of Nickel, Cobalt, and Ammonium
Sulphate products by AFNOR (the Association Française de Normalisation), the certification and standardization body. The
ISO 9001-2008 certification is needed to meet the requirements of the London Metal Exchange (LME). It confirms the ability of
Ambatovy to provide goods and services meeting the needs of our clients, and the conformity of our products with international
market requirements. Ambatovy has embarked on a quality approach through the implementation and the rollout of our Quality
Management System (QMS), since 2010, in order to meet the needs of our clients and stakeholders regarding our products and
services. The ISO certification remains valid for three years with an audit conducted every year to ensure Ambatovy continues
improving and meeting the established standards of the certification. In 2015 and 2016, Ambatovy had two surveillance audits to
confirm our continued compliance with ISO 9001 requirements, and we expect another audit in 2017 to renew our certification,
under the new and more stringent 2015 version of the ISO 9001 standard.
Voluntary Principles on Security and Human Rights (VPSHR)The duty to protect human rights rests with governments, but other actors in society, including business, have a responsibility
to respect human rights. Extractive industry companies, such as Ambatovy, have a unique opportunity to have a positive impact
on peace and stability, and we are continuously engaging with local, national and international entities to educate and raise
awareness for the promotion of human rights. Sherritt, our operator, is a member of the VPSHR Initiative. As such, the VPSHR
are embedded in Ambatovy’s Security Policy and, in order to reinforce shared commitments to the Principles, Ambatovy has
developed relationships and agreements with national ministries responsible for security that establish clear expectations for
public security forces and Ambatovy under the VPSHR. For more information on the VPSHR, please consult the section, below,
on our approach to human rights.
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Governance and Human Rights
Business EthicsAmbatovy’s core values require that we conduct our business in a moral and ethical manner and that our employees comply
with all applicable laws. To support this conduct, Ambatovy has a Business Ethics Code, a Code of Conduct, an Anti-Corruption
Policy and a Zero-Tolerance Policy. The requirements of our Anti-Corruption Policy have been established in compliance with
the Malagasy law on the fight against corruption as well as other applicable international legislation, and our Code of Conduct
and Zero-Tolerance Policy outline the company’s commitment to ethical conduct, compliance with the law, and avoidance of
conflicts of interest. All Ambatovy employees are sensitized on our Anti-Corruption Policy and Code of Conduct upon being hired
and compliance is compulsory. Refresher courses are given to our employees each year.
Our contractors are also required to comply with these policies and codes. A requirement to comply with business ethics,
anti-corruption, and code of conduct policies, such as Ambatovy’s Environmental Code of Conduct, is included in all contracts
awarded to new contractors to ensure they comply with our expectations in these areas; these policies and codes are regularly
renewed and updated. Ambatovy also systematically reaches out to our contractors and provides “Training of Trainers”
workshops at each of our sites, where contractor representatives acquire the necessary information with the expectation that
they will return to their respective companies and share the knowledge and skills they have acquired with their co-workers.
Ambatovy also requires contractors to disclose familial relationships with Ambatovy personnel and to sign an anti-nepotism
agreement to prevent the risk of familial interference and influence during the bidding process and throughout the business
relationship.
For the anti-corruption training, Ambatovy’s Human Resources Department prepared an interactive web-based training
tool featuring vignettes of culturally relevant situations. The training requires employees to watch each vignette and to
guide a fictional employee to respond appropriately to circumstances where the potential for corruption or fraud exists.
The vignettes include such situations as an employee being pressured by a friend to secure a job and a vendor offering
a gift to an employee if that person “overlooked” the fact that the vendor had not passed the safety audit. The vignettes
were developed to resemble a well-liked style of Malagasy theatre and used well-known Malagasy actors. Both national
and expatriate employees are required to complete this training so that everyone has a common starting point for further
conversations about corruption and appropriate responses to difficult situations. Employees and contractors who have
taken part in the training have given positive feedback.
30
Governance and Human Rights
Our Approach to Human RightsAt Ambatovy, we take human rights very seriously, in line with our commitment to minimizing actual and potential negative
impacts of our operations on our local communities, and human rights protection and awareness have been integrated into our
operational and sustainability strategies. Human rights are addressed through the IFC Performance Standards, with which we
are obliged to comply, and as noted earlier in this report, Sherritt, our operator, is a member of the VPSHR. We believe that
human rights is everyone’s responsibility and, as a major purchaser of goods and services in Madagascar, we have worked
to ensure that human rights violations are not present in our supply chains. In 2012, Ambatovy was subject to an assessment
concerning human rights as part of a due diligence prior to entering into partnerships with international organizations, and in
2014, we adopted a formal Human Rights Policy, which affirms the commitment of Ambatovy to operate in a way that respects
human rights as set forth in the Universal Declaration of Human Rights (UDHR). Both employees and external stakeholders
have access to Ambatovy’s Grievance Management System for filing grievances on any subject, including human rights
violations. We respect the confidentiality of anyone who raises concerns through this system. If we identify adverse human
rights impacts, we will take steps to address them promptly (although, to-date, no human rights-related grievances have been
reported).
Minimizing Potential Impacts on Human RightsUnfortunately, violation of children’s rights is a risk in Madagascar. Child labor is common in the country and we recognize the
potential risk for children, and others, to be forced into unsupervised and hazardous working conditions in any sector. Our Human
Rights Policy articulates our commitment to the Convention on the Rights of the Child (CRC) and the entire workforce must sign
our Zero-Tolerance Policy for child exploitation. All of our contractors are also required to adhere to our policies on child and
forced labor and fundamental human rights. For example, when a local business is being considered as a potential future supplier
or service provider, human rights considerations are part of the assessment process. For our existing suppliers, audits are carried
out sporadically by staff from ALBI and our QMS team. In 2016, 21 local vendors were audited, bringing the total number of audits
carried out to almost 540 since 2011. ALBI is fully integrated within Ambatovy’s Supply Chain Management (SCM) Department to
identify local businesses capable of responding to our company standards. In the event there is an actual or potential violation of
human rights, the contractor is immediately suspended from our supplier list as a human rights violation is considered a breach of
our mandatory Code of Conduct.
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Governance and Human Rights
In order to be in line with best practices for industries around the world and to promote continuous improvement, we will be working with UNICEF in 2017 and beyond to update the tools and communication methods that we currently use, and to do some refresher training and awareness-raising with Senior Management and the SCM team on Children’s Rights and Business Principles and the Zero-Tolerance Policy, especially since there has been much staff turnover since the policy was adopted a few years ago.
In October 2016, the UN Special Rapporteur on the issue of human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment, Mr. John H. Knox, made a country visit to Madagascar in order to examine how the country is implementing human rights related to environmental protection, to identify good practices and lessons learned, and to consider the challenges the country faces in the implementation of environmentally-related human rights. During his visit, the Special Rapporteur met with Ambatovy staff and visited our office in Moramanga in order to learn more about our commitment to human rights, our environmental code of conduct, and our work on eco-systems services, no net loss, offsets, community activities, etc. At the end of his mission, he issued a statement which noted: “Human rights are also important to the protection and sustainable use of mineral resources. To ensure that human rights and the environment are respected, mining permits should be issued only after a full assessment of environmental and social impacts is completed, all relevant information is provided publicly, and local communities are consulted for their views on the proposed operation. When done correctly, this process can and should result in benefits not only for the country as a whole, but also for the local communities directly affected by the mining. In Moramanga, I visited a training center operated by Ambatovy that provides a concrete example of such benefits.3
Voluntary Principles on Security and Human RightsWe began to implement the VPSHR in 2009 and, since then, the VPSHR have been providing us with guidance on safeguarding our people, assets, reputation and the environment, while respecting human rights of the public. Our security policy outlines our principles for creating a safe and secure business environment and for conducting security operations in compliance with local, national and international legal requirements, security standards and law enforcement principles.
Ambatovy has taken a series of proactive steps to bring our sites into greater conformance with the VPSHR. In 2012 and 2013, Ambatovy conducted third-party rights risk assessments that mapped out human rights and security-related risks to both our company and our stakeholders. The results of the risk assessment have been used to strengthen existing policies and procedures as well as to develop new systems and programs to prevent and mitigate the identified risks.
We have incorporated VPSHR-related requirements into our agreements with both private and public security providers. Such requirements include pre-employment screening and comprehensive training on security, human rights and the use of force. Human rights awareness is also now a requirement of security companies submitting or resubmitting proposals in our contract tender process.
In 2016, there were no security incidents involving allegations or claims of human rights’ abuses at Ambatovy. Our security and human rights training results remained comparable to 2015: 75% of full-time security personnel, 90% of contract security personnel, and 100% of public security officials based near our operations were trained.
As a proponent of the VPSHR in Madagascar, Ambatovy participates in regular information sharing and meetings with the business and international communities and has formed partnerships with government bodies and international organizations, such as the International Committee of the Red Cross (ICRC) and the French Embassy’s Gendarmerie Cooperation Program, to facilitate training for public and private security providers and to ensure the inclusion of human rights awareness in the training curriculum. Such training has included a five-day seminar on the VPSHR with representatives from Madagascar’s army, gendarmerie, police, judiciary, the National Independent Anti-Corruption Office (BIANCO), the Chiefs of Districts of Toamasina, and Ambatovy’s private security providers.
3 Statement of United Nations Special Rapporteur, Mr. John H. Knox, on the conclusion of his mission to Madagascar, 31 October 2016.
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Governance and Human Rights
In 2016, Ambatovy participated in an initiative led by the international NGO Search for Common Ground (SFCG) and funded by the British Embassy to promote good governance and human rights in the extractive sector. The six-month project was
launched with the participation of the British Ambassador, the US Ambassador, and Madagascar’s Minister of Mines. It focused
on the implementation of the VPSHR and the UN Guiding Principles on Business and Human Rights, and included joint trainings
and high-level roundtable discussions. As part of this project, Ambatovy staff from the Sustainability and Security Departments
attended a training workshop on the VPSHR that was held in Moramanga and that brought together representatives from local
government, civil society groups and Ambatovy.
In November, Ambatovy also signed an umbrella agreement with the United Nations System in Madagascar to work together
to contribute to the social and economic development priorities of the two regions where we work, including the promotion and
integration of our commitment to human rights-related principles – such as the VPSHR, among others – in order to effectively
analyze and address human rights risks.
Ambatovy’s progress in relation to commitments to the VPSHR is included in an annual report submitted by Sherritt to the
Voluntary Principles Association. In 2017 and beyond, Ambatovy will continue to promote the VPSHR in Madagascar and
explore opportunities for collaboration on these issues with groups such as the Office of the UN High Commissioner for Human
Rights (OHCHR), the ICRC and SFCG.
The Ambatovy Grievance Management SystemAn important aspect of engaging with our stakeholders and building our social license 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. However, for those issues that cannot be resolved through direct consultation, it is important to provide
a credible, confidential and formal mechanism to receive and address grievances. Grievance mechanisms are processes to
receive, classify, 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. At Ambatovy, remedies
for complaints, up to and including potential human rights violations, are provided through our Grievance Management System.
Since 2012, Ambatovy’s Grievance Management System has provided our communities with a transparent, participatory
channel through which anyone can raise an issue of concern and be assured that he/she will receive a fair and thorough
consideration. The system includes an External Grievance Oversight Committee, comprised of respected members of local
communities, that meets regularly to review the overall grievance management process (the response time, the fairness of the
system, the relevance of resolutions, etc.) and to provide feedback and suggestions for improvement. In 2016, the Committee
met three times and carried out follow-up visits to the field in order to monitor how grievances are truly handled and resolved
on the ground. Based on recommendations made in 2015, three capacity building sessions were held in 2016 for 41 grievance
registry managers in order to strengthen their work.
In 2016, Ambatovy received 116 grievances, a significant decline from the 236 grievances we received in 2015. Of the 116
grievances received during the year, 100 related to impacts on society, predominantly impacted rice fields from construction
activities, and a few were linked to livelihoods, land acquisition and other issues. In response to the key issue of impacted rice
fields, we worked to restore rice paddies, where possible, to compensate farmers for their losses, and to provide training on
improved production techniques. Sixteen grievances were environmental in nature, relating to water contamination by elevated
levels of manganese (described in the Environment section of this report, under Water Quality) and odor resulting from gas
released at the Plant Site.
We attribute the decrease in the number of grievances received to the success of face-to-face consultations, significant progress
on the completion of rice field restoration (which was a considerable issue during construction), as well as the increasing
maturity and stability of our operations.
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Economic Performance
ECONOMIC PERFORMANCE GOALS 2016 RESULTS
Prioritize local procurement 40% of Ambatovy’s purchases were made from local companies.
Invest in local capacity to participate in our
supply chain
Thanks to SCM and ALBI efforts, Ambatovy is now able to recycle wood,
plastics, cooking oil, paper and tires with local organizations.
Support our local communities in income
generating activities (IGA)
We facilitated a partnership with the Malagasy company Homéopharma to help
the community members gain an additional source of regular, reliable income.
OverviewAmbatovy is aware that our presence in Madagascar can have a considerable economic impact at the national and local levels.
Our vision is to significantly contribute to Madagascar’s development and to maximize the economic returns of our operations to
our local communities. On the national level, with Ambatovy’s exports beginning in 2012, nickel has already taken its place as
the top export of the country, supplanting the traditional leading exports (shrimp, spices, textiles). Ambatovy’s increasing nickel
exports will greatly contribute to stabilizing Madagascar’s trade balance, a first in the history of the country, lending stability to
the local currency. Locally, significant economic returns have already been seen in the form of wages, improved infrastructure,
and business opportunities.
We also recognize that negative impacts can occur and we have created mitigation measures to lessen these impacts as much
as possible. For example, to help control inflation, we purchase our produce from four bulk purchasing centers which source
from local farmers for fruits and vegetables. To assist in lessening the pressure of our employees’ presence on the local housing
market, Ambatovy has provided housing assistance for employees in certain areas to secure land, obtain loans and build their
own houses. Ambatovy also recognizes that with an investment of this size, there is a responsibility to ensure that funds are
managed ethically and transparently and that we do our due diligence to lessen the chance of corruption in our transactions.
Direct Economic Value GeneratedAlthough Ambatovy is not yet operating at full capacity, direct economic benefits are being observed at the local and national
levels. In 2016, we paid $ 20.5 million US to the Malagasy Government in taxes and fees, and approximately $ 26 million US
went straight into the local economy in the form of employee wages and benefits. In addition, approximately $ 200 million US
was paid to local vendors during the year.
34
Economic Performance
Operating CostsAmbatovy is currently an investment of approximately $ 8 billion US, the largest in Madagascar’s history. The table below
provides the costs incurred in 2016, including salaries and benefits, local procurement, taxes and donations. Ambatovy is
currently accruing royalties that will be paid to the Government, but the actual payment of those royalties has been put on hold,
in agreement with the Government, pending the establishment of the above-mentioned mechanism for their transparent, safe
and effective management.
ANNUAL OPERATING COSTS IN 2016
Commodity Purchases 186,689,559
Operating Materials 133,627,909
Payroll 71,556,352
Consulting and Contractor Fees 80,477,042
Professional & TFT Taxes 4,438,350
Licensing Permits and Other Charges 683,251
Gifts and Donations 65,645
Other 52,328,598
Royalties 4,701,830
Donations to Political Entities -
Total 534,568,536
Note: Ambatovy’s annual operating costs reflect our total operating expenses in 2016, including payroll, taxes and any other payments. These figures may differ slightly from those reported by our partners due to currency conversions, % basis, and other factors.
Impact CompensationWhile Ambatovy endeavored to avoid and minimize impacts on the homes and livelihoods of surrounding communities, during
the construction of our facilities, especially our pipeline, some losses and impacts were unavoidable. The compensation for
losses and the restoration of impacted rice fields were carried out and are now complete, but Ambatovy continues to support the
affected farmers by helping them to improve their harvests by providing training on improved production techniques and building
demonstration plots. This support will continue until production levels in the rehabilitated fields reach an agreed-upon output.
Likewise, for farmers with rice fields that have been more difficult to restore, we are still working with them on finding sustainable
solutions.
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Economic Performance
DonationsEvery year, Ambatovy sets aside funds to respond to requests for donations and sponsorships. Ambatovy has supported local
authorities and civil society groups that align with our community development goals and that work in the areas of education,
child protection, health and nutrition, and water, sanitation and hygiene. Our donations have funded activities related to World
AIDS Day, International Women’s Day and other such initiatives. Ambatovy has not made any donations to political parties,
politicians or related institutions.
In 2016, we continued to support a school feeding program and community nutrition project in the resettlement village of
Vohitrambato in collaboration with the Regional Office of Nutrition and the local non-governmental organization, Mitia. 340
students benefitted from the school feeding program, 78% of mothers in the village received training to improve their nutritional
practices and 87% of the children in the village had their nutritional status monitored. In order to help make the program
sustainable, school gardens were established in which parents and the local community can get involved. During the 2015-16
school year, 75 Ambatovy employees volunteered their time at the school to help families and school instructors in preparing,
cooking and serving well-balanced meals to the children.
In March 2016, the Malagasy Government declared a state of emergency for the drought-affected southern regions of the
country. At the time, nearly 1,140,000 persons in seven districts were considered food-insecure (both severely and moderately)
and in need of assistance. Ambatovy was among the companies alerted by authorities with regards to this extremely difficult
situation in the South, so we joined forces with four other like-minded businesses to provide relief to vulnerable families.
Working in collaboration with the National Office of Disaster Risk Management (BNGRC), the National Office of Nutrition, and
the Adventist Development and Relief Agency (ADRA), we were able to provide food rations for 1,000 families for one month.
This is not a geographic zone where Ambatovy typically intervenes, but the donation was made in a gesture of solidarity and
compassion for this extremely hard-hit area.
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Economic Performance
Payments to the GovernmentIn 2016, Ambatovy paid approximately $ 20.5 million US in tariffs, taxes, and other government payments, excluding royalties.
There were no fines related to environmental or product compliance infractions.
Payments to Providers of CapitalIn 2007, Ambatovy’s partners reached a financing agreement for a total of $ 2.1 billion US with a consortium of 14 lending
institutions. A negotiation with Ambatovy’s lender banks was successfully concluded whereby the banks agreed to defer senior
loan principal payments for the next three years, in recognition of the current low nickel price environment. In August, Ambatovy
entered into an agreement with our lenders on six principal payment deferrals, starting retroactively with the semi-annual
principal payment due June 15, 2016. During 2016, Ambatovy repaid none of the principal repayments as a result of this deferral
agreement. It should be noted that Ambatovy does not receive financing from the Government of Madagascar.
Significant Investment Agreements and Contracts Ambatovy did not make any significant investment agreements and contracts that include human rights clauses or that
underwent human rights screenings during the period.4 Our lending agreement, however, stipulates that we uphold the IFC
Performance Standards, which provide our standard for labor conditions, respect for cultural heritage and other human rights-
related issues. Several members of our lending consortium are Equator Principles banks and, as a result, we are required to
operate in accordance with those principles, which also incorporate human rights into their requirements. As noted earlier in
this report, Ambatovy has integrated the VPSHR into our security framework and has conducted multiple activities promoting
the VPSHR within Madagascar. In 2014, Sherritt, our operator, was admitted into the Voluntary Principles Association, thereby
affirming Ambatovy’s commitment to upholding and promoting the VPSHR.
4 “Significant investment agreements and contracts” are defined as per the GRI G4 guidance as those that “moved the organization into a position of ownership in another entity or initiated a capital investment project that was material to financial accounts.” According to GRI guidelines, the report should indicate whether these agreements and contracts contain clauses on human rights or underwent human rights screenings. This indicator measures the extent to which human rights considerations are integrated into an organization’s economic decisions and is particularly relevant for organizations that operate within, or are partners in ventures in, regions where the protection of human rights is of significant concern.
37
Economic Performance
Community and Indirect Impact InvestmentsIn 2012, Ambatovy, in partnership with the Government of Madagascar, created the Social Investment Fund (SIF), with a total
value of $ 25 million US, to be used for social and infrastructure projects for the benefit of the local population. These projects
have been identified in collaboration with our local communities and Malagasy authorities, and are managed in accordance with
Ambatovy’s procurement and purchasing policies.
By the end of 2016, 17 projects had been identified to complete the SIF’s $ 25 million US commitment. These projects are:
• the establishment of a social business, an integrated poultry farm known as the Harenasoa Poultry Project (completed in
2016)
• the rehabilitation of the century-old Bazary Be market in Toamasina (completed in 2014)
• the destruction of the Zeren ammonia stock stored in two old and deteriorating pressure vessels which represented a serious
safety hazard for neighboring communities in Toamasina (completed in 2014)
• the rehabilitation of the market in Moramanga (ongoing; completion expected in 2017)
• the rehabilitation of a portion of road in Ambatondrazaka to improve the road infrastructure quality in the capital of the Alaotra
Mangoro Region (completed in 2016)
• support for the collection and recycling of domestic waste in Moramanga through the “Moramadio” waste management
project (ongoing)5
• support for the collection and recycling of domestic waste in Toamasina through the “Tamadio” waste management project (ongoing)
• the creation of a Civil Protection Unit in Toamasina to strengthen the city’s emergency response capacities (completed in 2016)
• support for JIRAMA in Toamasina, the national water and energy provider, through the donation of two generators producing
12.6 MW of power to support electricity supply in Toamasina (completed in 2016)
• provision of equipment and the donation of two fire trucks for the fire brigade in Toamasina (completed in 2016)
• the rehabilitation of the Technical and Vocational High School in Toamasina (completed in 2016)
• support for the establishment of a mechanism for the good governance of royalties, Tsara Tantana (ongoing)
• the rehabilitation of the market in Brickaville (ongoing)
• the rehabilitation/construction of some small-scale infrastructure in Toamasina (ongoing)
• the construction of a laboratory for the ONE in Toamasina so that it can independently perform analyses (ongoing)
• the rehabilitation of the trial court building in Moramanga (ongoing)
• the provision of an ambulance for Moramanga (ongoing)
5 “Moramadio” is the combination of two words “Moramanga” and “madio” which is Malagasy for “clean”; similarly for “Tamadio” in the case of the waste management project in Toamasina (Tamatave).
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Economic Performance
In 2016, significant progress was made on multiple SIF projects, including the renovation of the Technical and Vocational High School in Toamasina to enable students to work in an educational setting that is up to standards and to help them achieve better academic results. This project involved renovating workshops for carpentry, metal structure, building and public works, general mechanics and auto mechanics. In addition, the building’s electricity and sanitary facilities were upgraded for faculty, staff and students. It is expected that the renovation of these workshops will help students to gain highly relevant hands-on experience and to develop new skills. It will also support their employability when they enter the job market. The newly renovated facilities were inaugurated during a ceremony in October. In attendance were the President of the Republic of Madagascar and the Minister of Labor, Technical and Vocational Training, among other stakeholders. “Technical and vocational training is among the leading pillars of development and we know that it is of particular importance for the Government of Madagascar. Ambatovy is proud to contribute to improving the infrastructure that will prepare the future talent of the Atsinanana Region,” stated Mr. Louis Roland-Gosselin, Ambatovy’s Vice President of Sustainable Development, during the inauguration ceremony. In order to contribute to the improvement of electricity supply and to reduce the problem of load shedding in the city of Toamasina, Ambatovy provided JIRAMA (the state electricity and water supply company) with two generators for its power plant in Toamasina. The project included the purchase and commissioning of two generator sets, as well as the necessary accessories to install the equipment, in order to allow the production of 12.6 MW of power. An official ceremony was held in Toamasina in late September to hand over the project, in the presence of the President of the Republic of Madagascar and Ambatovy’s President. We were also honored to have the Canadian Ambassador to Madagascar with us at the ceremony.
39
Economic Performance
Local Job Creation and RecruitmentAmbatovy remains firmly committed to maximizing employment opportunities for the Malagasy population. We endeavor to
attract local talent and invest in the development of our workforce. By the end of 2016, our total workforce was approximately
8,000 employees: around 3,000 direct operations employees and 5,000 subcontractor employees, with 90% of our employment
positions held by Malagasy. As of December 2016:
• 90% national employees for total workforce6
• 93% national employees for direct operations employees7
In 2016, nearly 10% of our supervisory positions, those that involve developing the competencies of other employees, were
filled by national employees.
For more information on recruitment and training, please see the section on Labor.
Local SuppliersAmbatovy is committed to maximizing the economic returns to our local communities. Towards that end, we have implemented
a range of programs and have made support tools available to local businesses and entrepreneurs so that they can provide
Ambatovy with goods and services that meet our standards of procurement and quality. The Ambatovy Local Business Initiative
(ALBI) was created during the construction period to support this commitment and to uphold our local procurement policy of
"buy locally, hire locally." In 2016, more than 860 local suppliers provided Ambatovy with goods and services across 40 sectors
of business including construction, transportation, cleaning and catering services. Examples of locally sourced materials include
the pallets used for our shipments of nickel and cobalt as well as uniforms distributed to our employees. These suppliers, in turn,
create much-needed job opportunities. The exact number of jobs created to indirectly support Ambatovy’s procurement needs is
difficult to calculate – however, we know that almost 500 jobs were created to build wood pallets, produce uniforms, and recycle
plastic, tires and wood.
6 Based on manpower headcount, which includes operations employees and sub-contractors, December 2016.7 Based on direct operations employee headcount, December 2016.
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Economic Performance
In 2016, Ambatovy continued to support the establishment and capacity building of local businesses in fields needed by our
operations. Over the course of the year, 21 local vendors were mentored on Ambatovy’s Health, Safety and Environmental
standards. Six training modules have been developed and provided for free to selected local vendors: Quality, Health and
Safety, Environment, Labor Code, Cash Flow Forecast and Cost Price Analysis. 35 participants from 17 local vendors also
received training in our Environmental Code of Conduct in 2016, making a total of 129 vendors to-date that have received this
training. During the year, with the help of ALBI, two recycling companies were formed that will handle tire and paper recycling,
and a new local association was identified to begin receiving Ambatovy’s waste wood. All told, local businesses created with
Ambatovy’s support have led to more than 200 direct jobs for our local communities. For more information about our recycling
efforts with these local businesses, please see the section on Environment.
TafitaSupplierDatabaseThe Tafita Supplier Database is an internal data management system that allows us to improve local supplier definition,
linkages and availability for purchasing and contracts. To qualify to be entered into the database, a supplier must demonstrate
compliance with Ambatovy’s standards with regards to quality, on-time delivery, health and safety, anti-corruption, environmental
requirements and labor, among others. This ensures that potential suppliers fulfill legal, tax and regulatory requirements prior to
being authorized to engage in business with Ambatovy. By the end of 2016, more than 4,500 businesses were registered in our
database, 64% of which are Malagasy enterprises.
Ambatovy continues to remain dedicated to local procurement and has seen success in emphasizing local sourcing whenever it
is possible. Since 2012, Ambatovy has spent approximately $ 3.3 billion US in local purchases; in 2016, alone, this number was
around $ 200 million US.
Ambatovy has a large stock of pallets and wooden crates stored at our Plant Site. In order to not waste or throw away these useful resources, Ambatovy turns to local associations and businesses to recycle and transform them, including the Cultural and Social Centre (CCS) of Toamasina. The CCS is a school and training center for disadvantaged young people. Coming from the neighborhoods of Toamasina, these youth learn various specialties, enabling them to find jobs in the future or to even create their own small businesses. Through ALBI, Ambatovy donates our used wood to the CCS so that it can be recycled and transformed into furniture and various daily life objects, as well as into chip briquettes to reduce the use of charcoal. Ambatovy can deliver up to 200 m3 of used wood per month.
“CCS is one of the most equipped workshops throughout Toamasina,” indicated Mr. Ratovonera, the Centre’s Director. “So far, we have noted that our trainees can easily find jobs once they complete their training. Moreover, our best students are regularly sought after by companies,” he added.
Over the long run, the Centre expects to see significant benefits for the region’s development: employment creation, entrepreneurship development, and pollution reduction. In 2016, a total of 1,726 m3 of wood was donated to the CCS as well as to another NGO based in Toamasina, Saint Gabriel, to be transformed into furniture such as school benches, chairs and office tables. Ambatovy bought meeting tables and chairs from the CCS and donated them to the offices of two local fokontany in Toamasina II. Towards the end of 2016, a new initiative for the recycling of wood at the Mine Site began with the local farmers’ association FIMIAM. Like the project with the CCS, it aims to make use of used wood to help preserve the environment, provide income generating opportunities for members of the association, donate needed wooden furniture and equipment to the commune, and contribute to the creation of employment for youth. Four agreements were signed between FIMIAM and its partners in mid-December to get this initiative underway.
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Communities and Social Relations
COMMUNITIES AND SOCIAL RELATIONS GOALS 2016 RESULTS
Mitigate potential negative impacts on
affected populations and their surroundings
Ambatovy continued to work with farmers whose rice fields had been impacted
during construction by helping them obtain better yields through improved water
management and by establishing 28 demonstration plots for farmers to learn
new techniques.
Develop a climate of trust between
Ambatovy and the communities
Over the course of 2016, Ambatovy organized nine Open Doors exhibitions
in Antananarivo, Moramanga, Brickaville and Toamasina, with approximately
46,000 visitors. We also adopted a new approach, “mini Open Doors”, in
the smaller towns of Andasibe, Ambohibary and Morarano Gare, which also
attracted a number of interested people. We continued to engage regularly
with communities near our operating sites and in 2016, we held a total of 690
community meetings. We also continued our program of activities with the
international NGO Search for Common Ground to strengthen dialogue and
communication between the company and neighboring communities.
Promote positive socio-economic impacts in
the communities
Through extensive consultations and meetings with local authorities, community
members and civil society groups, several small-scale projects were identified
and implemented in the Moramanga, Brickaville and Toamasina areas with
support from Ambatovy (55 projects total). Examples of projects we supported
in 2016 include: installation of water pumps, training workshops for youth,
rehabilitation of water supply systems, provision of equipment and furniture for
local schools, donation of equipment to fishermen’s groups, renovation of health
centers, support for the preparation of the Economic and Social Development
Framework Plan for Grand Tamatave, and so on.
OverviewWe wish to maintain a positive relationship with the people living around our areas of business and we endeavor to ensure that
being our neighbor is a globally positive experience. The process of how we handle these impacts and the end results, both
positive and negative, affect our relationship with local communities. Our Communities and Social Relations program focuses
primarily on livelihoods development, community health and safety, work with resettled families, and community engagement.
Supporting livelihoods in our communities has remained a focus of our Communities and Social Relations program. In 2016,
Ambatovy contributed to infrastructure development through the Social Investment Fund (SIF) and continued providing training
in sustainable agricultural techniques to farmers in all of our communities.
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Communities and Social Relations
Our community engagement is with members of local communities and with representatives of the private sector, civil society,
the media and the international community as well. Throughout the year, we continued to emphasize open, transparent
communication with local communities concerning our activities. As major extractive operations of Ambatovy’s magnitude are
still relatively new in Madagascar, we have seen a need to increase community interaction and face-to-face consultations
to counter wide-spread rumors, fears and misunderstandings. In 2016, this took the form of site visits, Open Doors events,
community consultations, and participation in community meetings.
Livelihoods DevelopmentThe Livelihoods Development component of our work reflects Ambatovy’s commitment to improving the living conditions of the
People Affected by the Project, or PAPs. The PAPs consist mainly of demobilized employees from Ambatovy’s construction
phase, of farmers living along the pipeline whose rice fields were damaged during the construction period, and of families that
needed to be relocated due to the construction of Ambatovy’s Plant, Tailings and Mine Sites.
The Livelihoods program aims to enhance food security for the PAPs as well as to ensure and increase their sources of income.
Ambatovy supports livelihood development through capacity building, organizational support and the provision of agricultural
inputs.
In 2016, Ambatovy supported the establishment of 10 farmer cooperatives in the Brickaville and Toamasina II areas, which bring
together 270 farmers along the pipeline. We provided training and inputs to the farmers, and helped them make contacts with
input suppliers and produce buyers. Each cooperative is currently dedicating its efforts to a specific sector, such as chicken
breeding, or litchi, corn, pineapple, curcuma, and ginger cultivation. Another livelihoods activity entailed the delivery of 160
fishing nets, 80 life jackets and 16 coolers to five associations comprised of 120 fishermen around the marine outfall area.
In 2016, Ambatovy also financed the rehabilitation of a public washhouse in Anjoma, Toamasina. Through a collaboration
between Ambatovy and the FIMPIDEMITO Association (United Depot Vendors’ Association), the rehabilitated public washhouse
accommodates around 50 washerwomen from various neighborhoods on a daily basis, including Anjoma, Androranga, and
Dépôt Analakinina. After four months of rehabilitation work, the official reopening ceremony for this public infrastructure took
place in late December. It is a means of helping the population improve both its working environment and its livelihoods.
Community Health and SafetyIn line with IFC Performance Standard 4, addressing the obligation of a project to “prevent or minimize the risks and impacts on
the communities’ health, safety, and security” resulting from the project’s activities, Ambatovy continues to focus on assessing
our impacts on the health and safety of our communities and identifying areas where we can assist in strategic community
health projects and safety initiatives. According to IFC Performance Standards, a Health Impact Assessment (HIA) is required
for a mining company with the objective to evaluate and understand positive and negative impacts, if any, our operations may
have on the local population’s health, and to make appropriate recommendations.
Following the advice of independent engineers, Ambatovy carried out an HIA in 2013. This first assessment utilized records
appraisal methodology, studies and consultations with stakeholders to produce a single report on the positive and negative
health impacts of Ambatovy’s operations. In 2014, with the inputs of the independent engineers as well as internal stakeholders,
the assessment report was finalized. From this document, an action plan was developed, taking into account some existing
health activities, and was validated by the Sustainability Division.
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Some of the health-related actions stemming from the HIA that are either completed or ongoing include:
• Providing medical equipment to the University Hospital Center in Toamasina to improve their response capacity in the event
of emergencies; rehabilitating the services of the Pulmonary Services Department at this hospital.
• Constructing an additional incinerator at the new Morafeno Hospital in Toamasina.
• Developing informational and educational programs to align knowledge about Ambatovy’s three types of gas emissions
and to improve understanding amongst different stakeholders on these issues (scientific researchers, science professors
in middle schools and high schools, physicians who are members of the Tamatave Medical Association, community
representatives, local authorities, and Ambatovy staff). In 2016, seven awareness-raising sessions about Ambatovy’s air
emissions and air quality monitoring systems were held in Toamasina, with 457 stakeholders including local authorities,
community health agents and religious leaders.
• Supporting awareness-raising campaigns and prevention programs on HIV/AIDS and Sexually Transmitted Infections (STIs)
in the workplace and in the community (please see below for more information on this work).
• Providing a sustainable water supply system for villages downstream of the TMF to address the non-compliance of
manganese levels; as a temporary, short-term response, the Sustainability team distributed 1,096,779 liters of water to 190
households in the 14 villages directly impacted by this problem. A permanent, alternative water supply system was designed
and construction work was expected to be finished in the first half of 2017.
• Developing a monitoring, information and education system for a Water Users Association to improve water conservation.
HIV/AIDSMadagascar has a relatively low prevalence of AIDS (estimated at .4% as of 2014) and the country has fortunately thus far been
able to escape the worst of the pandemic that has hit much of Sub-Saharan Africa. However, the high rates of other STIs plus
risky behaviors and other vulnerability factors amongst the population suggest that if HIV/AIDS were ever to gain a foothold
in Madagascar, it could spread rapidly, especially in urban areas. HIV/AIDS prevention and awareness therefore remain an
important commitment for Ambatovy in the field of health. Our objective is to contribute to the national goals of keeping the
HIV/AIDS prevalence rate under 1% in the general population and of “getting to three zeros”: zero new HIV infections, zero
discrimination and zero AIDS-related deaths.
Our HIV/AIDS efforts target employees and communities using a participatory approach through collaboration with Government,
civil society, youth groups, international agencies and community members.
The Employee Peer Educator program has been a key element in both our Zero-Tolerance and HIV/AIDS campaigns. Since
2011, Ambatovy has recruited employees to participate in the training program and, in turn, to educate fellow employees and
raise awareness of preventative measures. We now consider those who have participated in the program for several years as
“Senior Peer Educators”. They continue their awareness-raising activities more informally than formally. These Senior Peer
Educators have become leaders amongst their colleagues in many aspects of company life, not just HIV/AIDS awareness.
Ambatovy regularly takes part in World AIDS Day that is held each year on December 1st and, in 2016, we organized World
AIDS Day events at each of our sites, with awareness-raising, education and voluntary testing. 363 employees were screened
for HIV in Toamasina and 140 in Moramanga.
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Ten kiosks, renovated and constructed in partnership with the United Nations Children’s Fund (UNICEF), provide local youth
along the RN2 highway with locations for gathering, exchanging information and providing one another with support. The kiosks
are managed by a group of peer educators who have been trained and who then, in turn, provide support and information to
other local youth regarding HIV/AIDS and STIs. In 2015, all the kiosks were transferred to the Regional Direction of Youth and
Sports, which now supports and coaches the young peer educators.
During the fourth quarter of 2016, 25 young peer educators from the “Tamaga” kiosk in Toamasina benefited from training that
was provided by the Regional Task Force on HIV/AIDS Prevention with funding support from Ambatovy. Other training sessions,
conducted in collaboration with the Regional Direction of Youth and Sports in Atsinanana, also took place during this period and
focused on sports entertainment techniques and first aid. The Tamaga kiosk is particularly dynamic, one that is often frequented
by youth in the neighborhood, and Ambatovy plans to continue providing modest support in the future.
In November 2016, Ambatovy signed an umbrella agreement with the United Nations System in Madagascar to cooperate on
areas of common interest in the Atsinanana and Alaotra Mangoro Regions, including the fight against HIV/AIDS and STIs in
the workplace and surrounding zones. Ambatovy and the Joint United Nations Programme on HIV / AIDS (UNAIDS), one of
the six UN agencies included in this agreement, will endeavor to work together on continued awareness-raising campaigns
and capacity building. We will also consult on Ambatovy’s HIV/AIDS policy and annual work plans to ensure a uniform and fair
approach to the effective prevention of new HIV infections and to the treatment of AIDS amongst employees and their families,
and to ensure that our efforts are in compliance and up-to-date with current best practices, international standards and national
policies with regards to HIV/AIDS in the workplace.
Emergency Preparedness and ResponseAs good neighbors, it is critical that we ensure that our operations, transportation activities and other business practices
avoid unintended or adverse effects on the public. We follow the regulations of our operating jurisdiction, strive to meet the
expectations of nearby communities, and regularly engage and collaborate with local stakeholders on health and safety-related
risk awareness and emergency preparedness.
There are natural links between public safety and effective community engagement. Through engagement, we work to
understand public concerns and safety risks, evaluate steps we can take to reduce risk, help clarify misunderstandings and
dispel misinformation, and, when appropriate, collaborate with communities on initiatives that make all of us safer. Through
these efforts, we contribute to building a strong safety culture in the communities near our operating sites.
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One of the most important ways we protect both communities and our business is through effective emergency preparedness
and response planning. At the regional level, for example, we have collaborated with local and regional officials to create the
Regional Industrial Risk Management Committee, or CRGRI, for the Atsinanana Region. Ambatovy supported the creation of
this body and provided training and administrative support to its staff, which is led by the Chief of the Region. It is through this
collaboration that the three Intervention Preparedness Plans (Plans de Préparation d’Intervention, PPI), for the Atsinanana
Region were developed. These plans focus on possible incidents with Ambatovy’s ammonia, sulfur and TMF, and outline the
emergency response and procedures to be followed. The PPIs initially only considered ammonia-related risks, but an update in
2015 widened the PPIs to include other industrial risks including Hydrogen Sulphide (H2S), Sulphur Dioxide (S02) and also dam
failure risks at the TMF.
Regrettably, in 2016 there were two non-work-related fatalities involving community members. In the first incident, a local
villager was fatally injured while attempting to secure donated scrap wood that was being unloaded from an Ambatovy truck. In
the second incident, a local cart driver suffered fatal injuries after he lost control of his cart and collided with a light vehicle from
Ambatovy. We have investigated the root causes of these incidents and, as a result, have modified the way in which community-
bound material leaves the site and is delivered and have strengthened defensive driver training.
Key accomplishments in 2016 with regards to emergency preparedness and response include:
• Awareness-raising was carried out with the population downstream of the TMF on the risks of dam failure and on safety
measures to be carried out in the event there is an accident. 20 villages were targeted (with 205 households or 766 people),
with posters affixed and leaflets distributed describing the risks and providing safety instructions (including the identification of
22 high assembly points and nine collection points if there is ever a need to evacuate people). Particular efforts were made to
sensitize schoolchildren living in the area as well, since young people tend to be open and receptive to new information and
they can reinforce key messages with their parents and families.
• The Mine’s PPI is currently being developed, in consultation with key stakeholders (including regional authorities) and
in collaboration with the National Office of Disaster Risk Management (BNGRC), to identify possible risks near our mine
operations and to outline appropriate emergency response procedures.
• Through the SIF, Ambatovy supported the strengthening of the Civil Protection Unit (CPU) in the Atsinanana Region. The
CPU aims to address technical risks and natural disasters in the region. The project included construction of six equipped
buildings and the donation of seven vehicles for rapid intervention in case of disaster or emergency; an official hand-over of
the project took place in early June 2016.
• Ambatovy provided first responder training for emergency situations at the Mine Site. 18 members of the Mine Site’s
Emergency Response Team (ERT) were provided training on emergency preparedness and early response to accidents
(training that went beyond basic first aid). The training was conducted by trainers from International SOS. Participants
received certificates at the end of the training and will participate in refresher sessions every two years.
•We conducted a drill which simulated a public train colliding with a light vehicle near the Plant Site. The drill aimed at
detecting unnoticed risks that are likely to aggravate an emergency situation and included participation from external
organizations, including Madarail (the national rail company) and International SOS (the medical and travel security
assistance company). 11 awareness-raising sessions on rail traffic risks and safety instructions for people living and working
along the rail line were carried out for 3,374 PAPs, including schoolchildren, vendors, people with disabilities, and families.
• In early 2016, an unfortunate boating accident occurred on a river in the village of Ambodimanga, in the District of
Moramanga, near the Mine Site, resulting in many fatalities. The District set up an emergency aid committee to assist the
victims and their families. Although this accident was un-related to our operations and employees, as a gesture of solidarity
and with hopes of helping to prevent other accidents in the future, Ambatovy provided 15 life jackets to local officials so that
small boating craft can provide safe transport of passengers across the river. The Health and Safety team also provided
some basic training on the use of life jackets and on safety in the vicinity of rivers to boatmen in these areas.
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• Ambatovy rehabilitated and equipped two health huts located in Tanandava and Ambodisaina Ivondro that were handed
over to the community on September 22nd. The project aims to facilitate access to medical first aid for the members of the
community living near the Plant Site and the Tailings, prior to their transfer to major medical centers in Toamasina, located
about 15 km from their villages. In addition to the rehabilitation work, Ambatovy also donated medicines and equipped the
huts with medical equipment such as aneroid tensiometers, stethoscopes, weighing scales and beds.
• In November, Ambatovy signed an umbrella agreement with the United Nations System in Madagascar to cooperate on areas
of common interest in the Atsinanana and Alaotra Mangoro Regions, including on emergency preparedness and response.
Ambatovy and the Office for the Coordination of Humanitarian Affairs (OCHA), one of the six UN agencies included in this
agreement, will endeavor to work together on strengthening capacities at the regional level for emergency preparedness and
response, including industrial risks, and ensuring that Ambatovy’s efforts align with and are integrated into a wider national
emergency preparedness and response strategy.
Work with Resettlement VillagesVohitrambato and MarovatoTo facilitate construction, Ambatovy had to resettle villagers living in the vicinity of the Tailings and Plant Site. From December
2007 to February 2008, Ambatovy relocated 261 households living at these sites to two resettlement villages, Vohitrambato and
Marovato, where they received a range of services and benefits aimed at restoring their livelihoods and improving their quality of
life. The construction of the physical infrastructure, such as water points, school, and homes, was only part of our commitment
to the two relocation villages. Our task over the years has been to carry out a resettlement program following the World Bank’s
principles on involuntary resettlement, the IFC’s guidelines for resettlement action plans, and guidelines set by Madagascar’s
national regulatory body.
Although the relocation itself is completed, Ambatovy continues to provide support and ensure the sustainability of our
commitments in the resettlement villages. Our work in the resettlement communities focuses on livelihoods, health and hygiene,
education and governance. With this multidisciplinary approach, we are committed to making sure that all aspects of village life
are restored.
Nine years after their resettlement, the villagers have demonstrated a desire and willingness to further their own development.
For instance, the Village Savings and Loan Associations (VSLAs), which are self-managed local groups, have become a core
activity of the community and have proven to be very successful. Group leaders were given initial training so that they, in turn,
could create new VSLAs. By the end of 2016, four groups had been created, with 131 members. The VSLAs have given farmers
the opportunity to increase their capital based on self-reliance and community-based empowerment, and have allowed them
to invest in agricultural activities (small animal husbandry, vegetable gardening), to market their products, to cover health and
education expenses for their families, and to meet certain social obligations.
During 2016, the population of Vohitrambato and Homéopharma, a Malagasy company that focuses on developing and
producing natural products for health and well-being, signed an agreement for a new partnership to plant 8,000 noni trees (noni
is a tree in the coffee family used to help treat a variety of health problems such as diabetes, high blood pressure, arthritis,
aches and pains, inflammation, infections, etc.). The objective of the partnership, which was developed with the assistance and
facilitation of Ambatovy’s Sustainability team, is to help the community gain an additional source of regular, reliable income,
especially since we are in the process of gradually withdrawing our work at Vohitrambato. Farmers in Vohitrambato have
agricultural plots covering an area of more than 800 ha, and have received training in agriculture techniques and fruit growing.
Homéopharma financed the purchase of the noni seedlings, and will provide technical advice for the noni production, ensure
monitoring and quality control of the plantations, and buy the noni crop from farmers.
As part of our commitment to resettled families and their hosts in Vohitrambato, Ambatovy has also agreed to pay 50% of the
school fees of all students under 13 years old. Ambatovy pays the tuition fees directly to these students’ parents based on a list
provided by the heads of the Vohitrambato primary school and the Ambodisaina middle school.
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The 2015-16 school year marked the seventh payment of these tuition fees, with 229 students benefitting from the program.
With regards to technical training, 14 scholarships have been awarded since the initiative’s creation. For the 2015-16 school
year, no students applied for funding, so on an exceptional basis, three students who had been accepted to study at university
or who wanted to pursue training at a higher level received scholarships to cover their tuition fees, with the possibility of renewal
for 2016-17, depending on their results.
Resettlement CommitteeCreated in 2006, the purpose of the Resettlement Committee in Vohitrambato is to act as an interface between Ambatovy and
the resettled populations, to advise Ambatovy on decisions, and to give transparency to the consultation process. Since its
creation, the Resettlement Committee has played a major and significant role in helping to bring the community of Vohitrambato
to its current state and to help residents understand the importance of taking ownership of their own development. Indeed, we
have come to a true state of partnership with the Resettlement Committee. In 2014, for example, the Resettlement Committee
conducted a relocation process assessment and provided recommendations on the health and livelihoods programs, and
contributed to establishing Ambatovy’s policy for the identification and care of vulnerable persons. In 2015, Ambatovy worked
closely with the Resettlement Committee to sensitize community members on the sustainability aspects of the hen raising
income-generating project.
2016 was the tenth year of the Resettlement Committee’s existence and a special event was organized in early 2017, a “mini
Open Doors”, to mark this important milestone and to honor their hard work, progress and accomplishments during the decade.
It was also an opportunity to make known to a broader group of people the role that Ambatovy has played in this process.
Ambatovy continues to support the community and welcomes the opportunity to exchange with community members, with the
Resettlement Committee acting as an excellent facilitator and intermediary.
New Resettlement InitiativesIn 2016, we started developing a plan for the resettlement of two villages, Ampangadiantrandraka and Ankazotokana, located
within the mine lease area. This involves families that were originally granted permission to stay where they were, with the
understanding that they would not spread out, because of our environmental obligations in the Environmental Management
and Social Development Plan. However, the families gradually did begin to grow, occupying more territory and attracting other
families. This put their own security as well as the security of the Mine at risk – thieves, for example, would steal fuel from the
Mine and hide it in the communities, or force the families to house them so that they could have access to the Mine at night
time. It started off with a couple families and they have now grown to 36 families that we are assisting to re-locate progressively
to areas outside the mine lease zone. A new Resettlement Committee was established to assist in this process, and two
meetings were held during the first half of 2016 to establish a resettlement plan and to develop an appropriate approach with
key stakeholders. Two joint field visits with the Resettlement Committee took place to validate the resettlement plan and two
public consultation sessions were held with families in order to inform them and get their feedback about the resettlement
process. The local NGO, EFA, was recruited to collect data, to conduct some participatory research and to draft key documents
that will be submitted to ONE for review and approval.
There is also the “economic resettlement” of 29 families in Ambolomaro, also near the Mine Site, which has been under
discussion since 2008. These families are not living inside the mine lease area, but their rice fields were inside so we have been
having discussions with them about moving their rice fields to other locations. From 2008 to 2015, we provided rice to families in
order to compensate for their lost rice production until they could start cultivating their new fields and could produce rice on their
own. In 2016 we changed our approach because we noted that, because of the way we were compensating and the amounts
we were giving, farmers had little incentive to farm their fields. We are now compensating them in a manner that is considered
fair and reasonable but that does not create dependency.
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Community EngagementOpen Doors Ambatovy is constantly striving to organize activities that strengthen the transparency of our operations. One of these activities
is the Open Doors events that serve as opportunities for Ambatovy to share information, dispel rumors and educate the public
about Ambatovy, as well as provide the public with a live Q & A opportunity with Ambatovy staff. Despite the company’s financial
challenges and cost-cutting measures, Ambatovy held nine Open Doors events during 2016: two in Antananarivo, six in the
Alaotra Mangoro Region, and one in Toamasina. Combined, these events reached more than 46,000 people. In addition to
the Open Doors events, we also organized a special Open Doors session for students of the Poly-technical University of
Antananarivo in order to explain career opportunities at Ambatovy, to answer questions, to discuss their concerns and doubts
about the company, etc. Approximately 1,000 visitors attended.
RadioIn collaboration with the NGO Search for Common Ground, Ambatovy supported the creation of the “Miandrandra Maraina”
radio drama, as part of the Mazava Project.8 This radio drama, consisting of 32 episodes, was aired in Moramanga and
Toamasina during 2015 and 2016. Six Ambatovy employees were selected to be “actors” in the radio show, along with
professional actors. The radio show reflected situations, daily occurrences, opportunities and dilemmas in the life of a fictional
community where a mining company is located. Local elections, community development, challenges at work, households’
financial difficulties, and the presence of the mining company are among the many issues that community members must face.
In addition to airing the show on local radio stations, SFCG organized listening groups with civil society organizations and
residents near our areas to encourage discussion and reflection on themes raised during the episodes, and also made special
arrangements to have the shows broadcasted in more public settings, such as at weekly markets, in order to ensure a wider
audience.
Public Information Centers and Site VisitsAmbatovy’s Information Centers, located in Moramanga and Toamasina, are open to the public and provide a valuable place for
people to come and learn about the company as well as exchange with Ambatovy representatives. Every year, Ambatovy hosts
thousands of visitors at our Information Centers. In 2016, around 10,000 people passed through one of our two centers.
Ambatovy also hosts guided site visits, on an appointment basis, to further provide a chance for the public to experience
Ambatovy for themselves and learn more about the Plant and Mine Sites’ operations. In 2016, more than 11,000 visitors visited
Ambatovy’s sites, including representatives from local and international media, the government and diplomatic community,
scouting organizations and school groups, and the general public.
8 “Miandrandra Maraina” means “In Search of Dawn” and “Mazavaˮ means “light” or “clear”.
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InfovanThe information van, or “Infovan”, is a mobile roadshow that travels the Ambatovy pipeline to inform and update thousands
of people from dozens of small communities about Ambatovy’s activities, key issues, and matters of interest for them. The
Infovan’s outreach activities also include attending events, fairs, and celebrations throughout our operation areas. In 2016,
the Infovan reached 99 communities and nearly 6,000 villagers. It also received nearly 9,000 people during presentations and
events that took place in Toamasina.
Community ParticipationAmbatovy community agents and staff meet regularly with local authorities, representatives of civil society groups, and
community members in both informal and formal settings. In 2016, Ambatovy held and attended 690 community meetings.
Significant themes that were discussed included Ambatovy’s operations, impacts and benefits to Madagascar; local governance;
royalty payments; rumors and misinformation; public health and safety concerns; water quality; community-based environmental
conservation; and security awareness.
Ambatovy participates in the Local Coordination Committee (CLC) meetings that occur four times per year, within our zones
of intervention (Moramanga, Brickaville and Toamasina II). The District of Toamasina I held its first quarterly meeting in
2016. These meetings support an active dialogue between the communities and the company, and provide Ambatovy and
communities a chance to address specific issues and concerns, to identify opportunities for engagement and discussion, etc.
Cultural HeritageAmbatovy’s commitment to our communities includes our respect for local culture, history, and traditions. To preserve this
cultural heritage, Ambatovy implemented a preventative archeology program, which involved respect for cultural heritage sites,
artifacts, and archeological remains found in Ambatovy’s intervention areas between Moramanga and Toamasina. In total, nearly
260 sacred sites, and 5,000 artifacts were identified and placed under protection during the construction period. The artifacts
are now housed in the Heritage Interpretation Center in Toamasina that was built by Ambatovy and turned over to the Ministry
of Culture in 2014. As the mine clearing continues, the search for artifacts and archeological items continues as a part of the
clearing process.
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Environment
ENVIRONMENT GOALS 2016 RESULTS
Achieve No Net Loss in biodiversity
throughout our impacted sites
In 2016, the Ambatovy Biodiversity Management System (ABMS) – which
operationalizes many of the principles in our biodiversity management approach
– was fully implemented. 12 status reports on 12 impact Management Plans
were written and validated by Quality Controllers. Five of the plans have finished
an entire cycle of ABMS (flora, birds, lemurs, mantella and micromammals).
Coaching on the implementation of the management system was provided to
stakeholders, including universities, NGOs, and offsite managers.
Support and empower local communities to
reduce pressure on conservation areas
Ambatovy continued our education program with peripheral communities and
worked with community-based associations (COBAs) for community centered
forest stewardship activities. Ambatovy also continued supporting the COBA
members with income-generating activities, namely 45 ha of land were planted
with eucalyptus trees, and 107 households have done poultry farming since
2015.
Maximize waste management to reduce
Ambatovy’s overall impact and footprint
Ambatovy furthered our waste recycling initiative, by identifying a local training
center and host communities to receive waste woods from our shipment pallets
and forest clearing actions.
OverviewOne of Ambatovy’s key goals is to minimize the impact of our operations on Madagascar’s environment. With regards to
biodiversity, the aim is to achieve no net loss, and, preferably, a net gain. We plan to accomplish these goals with rigorous
mitigation techniques such as avoidance, minimization of risks, timely restoration of a sustainable landscape, and the offsetting
of residual impacts.
Specific biodiversity goals have been established to ensure we meet our vision of operating a sustainable and responsible
business in Madagascar. These goals and associated key performance indicators (KPIs) are periodically assessed and adapted
based on consultations and data gathered from monitoring programs. The KPIs are directly linked to the requirements of
Madagascar’s regulator, the ONE, and to international standards, including the IFC Performance Standards on Environmental
and Social Sustainability (IFC 2012 version) and the BBOP standard. As noted earlier in this report, BBOP is a multi-stakeholder
initiative that seeks to develop best practice in biodiversity for developers of large greenfield projects. Ambatovy became a pilot
project for the BBOP initiative in 2006. In 2014, Ambatovy began implementing the Ambatovy Biodiversity Management System,
or ABMS, giving a structured and evolving framework for our biodiversity activities. The ABMS was fully implemented in 2016.
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Environment
The IFC Performance Standards (IFC 2012 version) include ecosystem services in the mitigation hierarchy, which are defined
as the benefits and services that humans draw from the ecosystem. Expressing biodiversity in terms of ecosystem services also
serves to make biodiversity more concrete, thus its protection should be facilitated.
The five most important services for the local population are, in order of importance: crops, construction wood (timber), water,
farming (livestock) and combustible biomass (specifically wood, energy-coal). These are all supply services. The results from
the preliminary surveys in 2016 based on bibliographical data helped to establish the baseline information on the status of
ecosystem services and on analytical methodology. Data update studies for the Mine and reference areas were completed
regarding: 1) the potentialities and the use of crops services; 2) the use of wood and wild food services; and 3) the observations
of human welfare. The preliminary results of the study showed that all services are perceived to have either declined or
stabilized. In general, all the services that have suffered deterioration are directly and/or indirectly related to the forest: wild
foods, timber, firewood, fibers, water. An on-going study will inform the cause of the decline – whether it comes from Ambatovy’s
presence or the global change of the environment – and these preliminary results will shape our future actions.
In 2009, Ambatovy established a Scientific Consultative Committee (SCC) on biodiversity in order to be transparent and to
apply international conservation expertise to our biodiversity management activities. The Committee includes 14 national and
international independent scientists renowned for their expertise in biodiversity, conservation and environmental management.
The Committee convenes every two years – most recently at the end of 2015 – in order to facilitate an external evaluation of our
implementation of the biodiversity management program and to make recommendations for the conservation of Madagascar’s
unique biodiversity. The Committee will meet again towards the end of 2017.
Our environment program has also defined objectives for air, water and noise. For each component, objectives have been
established considering existing background levels, Malagasy regulations, and published international standards. A rigorous
monitoring program has been put into place to track if these objectives are being met. The program is reviewed and updated in
response to observations, project development, consultations, and experiences gained.
Waste management plans are in place in order to ensure that the collection, storage, transportation and disposal of all waste
generated by Ambatovy will be conducted in a safe, efficient, and environmentally-responsible manner. In 2016, Ambatovy
continued to identify and work with local companies that are able to recycle various waste items, specifically old wood, used
tires, plastics, and cooking oil.
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Environment
BiodiversityThe main impacts on biodiversity from our activities are related primarily to forest clearance at the Mine (1,614 ha) and along a
two km strip of forest along the initial portion of the pipeline. Prior to construction, the forests of the Mine area were threatened
by human impacts such as agricultural clearing, illegal timber harvesting, and hunting. The Plant and Tailings Sites were
specifically located on modified degraded coastal scrubland habitat with low biodiversity. Nevertheless, impacts on all sites were
taken into account in the development of Ambatovy’s comprehensive biodiversity program, which applies to all sites. Its strategy
is founded on the following core objectives:
• No net loss of biodiversity and, preferably, a net gain.
• No species loss and no net reduction in the population of any endangered species.
• Minimization of impacts on flora, fauna, and aquatic resources.
• An increase in conservation of critical habitats.
• Priority habitat viability ensured by maintaining or increasing ecosystem connectivity.
• Integration of biodiversity activities with other regional initiatives on biodiversity.
In order to achieve these objectives, Ambatovy applies the mitigation hierarchy, as required by the IFC Performance Standard
6 and the BBOP Standard on Biodiversity Offsets. This includes: avoid impacts where possible, minimize any unavoidable
impacts, restore or repair any damage, and provide offsets for any residual impacts (e.g., through conservation and protection
of ecologically comparable conservation areas). Additional conservation actions may further compensate for the impacts on
biodiversity.
Avoidance: Ambatovy was designed, to the extent possible considering laws and regulations and economic/business concerns,
to avoid impacts on biodiversity. An example is the diversion of the pipeline route around forest patches and around breeding
sites of the critically endangered Mantella frogs. During construction, the pipeline was rerouted or bored under more than 20
locations in order to avoid impacting several pristine forest fragments.
Minimization: Impacts are minimized to the extent possible. As part of our mitigation measures, Ambatovy carries out regular
inventories of flora and fauna species present in our conservation zones and mine footprint, and before any clearing can take
place, an inventory and manual salvaging of any animals and priority flora species is conducted. Since the beginning of our
operations, Ambatovy has employed a technique called “paced directional clearing”, the first initiative of its kind in the mining
industry, which allows resident fauna to migrate freely into the adjacent conservation zones. Those that have not or are unable
to migrate are manually rescued along with priority flora species, including orchids.
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Environment
Rehabilitation/Restoration: Ambatovy will conduct progressive reclamation of the mine footprint that is compatible with the
historical ecology of the landscape. Community greenhouses, as well as Ambatovy’s own industrial scale production nursery
and research nursery, are essential parts of the research and restoration process. In 2016, 9.78 ha of land were reforested.
Offset: Measures are taken to compensate for any residual significant, adverse impacts that cannot be avoided, minimized, and/or
rehabilitated or restored, in order to achieve no net loss or a net gain of biodiversity.
Following these standards has resulted in a comprehensive approach to ensure that our impacts, as well as some that existed
prior to our involvement, are controlled through cooperation with local communities and the Government of Madagascar. The
program has several focal areas, including flora, fauna, offsets and aquatic and marine ecosystems. Each area has specific
actions for the construction, operations, and mine closure phases. In addition, we have specific Management Plans for the
Mine, pipeline, Plant, Tailings and port facilities that include biodiversity elements as well as a separate overall Biodiversity
Management System that governs all our programming in this area.
Ambatovy’s environmental management practices were cited as an example by Ms. Kerry ten Kate, the Director of the Biodiversity Initiative at Forest Trends and Director of the Business and Biodiversity Offsets Program, duringaTEDxTalkentitled“ThinkNetPositive ,ˮpresentedattheUniversityofStirling(UK)inNovember2016. “The company [Ambatovy] has set aside for permanent conservation, part of the area on which it had permission to mine, which is quite a significant economic sacrifice, but it is really important, particularly in a place like Madagascar”, she stated, when talking about the 3,600 ha of azonal forest conserved on the area where the ore containing nickel and cobalt is extracted. “Without these conservation activities, it’s extremely likely that much of these forests will be degraded and deforested over time through other pressures, particularly slash and burn agriculture, which has been a cause of loss over many years in this area … The project is by no means perfect, but it is a really serious effort of planning for no net loss of biodiversity. And, of course, it is just one project in one sector in one country.”
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Biodiversity ManagementAmbatovy Biodiversity Management SystemIn 2014, the Ambatovy Biodiversity Management System (ABMS) was designed. It is a comprehensive program driven by the
company’s project-wide standardization and quality improvement initiatives. This QAQC style management system brings our
environmental activities in line with ISO principles and meets IFC requirements for environmental management. The ABMS
provides for:
• continuous improvement and an adaptive management process;
• a monitoring and evaluation plan for all activities;
• indicators against international, national, and internal compliance requirements, scientific conformance requirements and
performance standards; and
• real-time updating and management of non-conformities.
The system includes 20 Management Plans covering the entirety of the Ambatovy environmental program, including plans
for each category of flora and fauna identified in our areas: amphibians, reptiles, birds, fish, and multiple species of flora, with
specialized plans for the management of our lemur and mantella populations.
In 2016, the ABMS was fully implemented. 12 status reports on 12 impact Management Plans (MPs) were written and
validated by Quality Controllers. Five of the plans have finished an entire cycle of ABMS (flora, birds, lemurs, mantella and
micromammals). Coaching on the implementation of the management system was provided to stakeholders, including
universities, NGOs, and offset site managers. Discussions were held to improve standard operating procedures (SOPs) and
database management.
Fauna ManagementAmbatovy’s Lemur Management Plan, within the overall ABMS program, includes a series of mitigation measures to frame our
work with regards to lemur species within our sites.
Our Lemur Management Plan closely monitors and collects data on all lemur species found within our zones, but Ambatovy
focuses our long-term monitoring and biomedical surveys on five specific species of lemurs within our program areas (the
Diadem sifaka, Eastern woolly lemur, Weasel sportive lemur, Furry-eared dwarf lemur, and Indri), chosen for their IUCN status,
ecological niche, and the number of individuals available for study. By focusing on these five species in particular, Ambatovy’s
Environment team is able to increase the quantity and quality of the data it can collect. This data provides a more accurate
snapshot of the entire lemur population in our areas.
In 2016, Ambatovy continued the implementation of the paced directional clearing cutting method. The 48-hour break before
the large-trees felling step allows the animals to escape through free migration in front of uncleared areas and/or to the
forest corridors. It also facilitates the manual salvage of animals, mainly of lemurs trapped in cleared areas. In 2016, a total
of 22 lemurs were manually salvaged and transferred to Ambatovy/Analamay release sites. 20 of the rescued individuals are
nocturnal lemurs that cannot escape during the clearing activities that occurr in the morning.
During the year, only one capture session was carried out in collaboration with Duke Lemur Center as part of the marking,
the replacement of radio collars and the biomedical monitoring of lemurs. Since the first capture of lemurs in 2007, the lemur
management program has recorded over 1,067 captures to-date, with 881 initial captures and 186 recaptures. For 2016, 42
individuals were caught, including 30 newly captured individuals and 12 recaptured individuals. During 2016, 20 lemur births
were recorded for four species. 16 lemur deaths were also recorded, as a result of predators, hunting, natural death and/or other
incidents.
In 2016, Ambatovy was proud to take part in the World Lemur Festival in Antananarivo. The theme was: “Lemurs, national
heritage, friends to protect.” The Festival represented an important opportunity for Ambatovy to share with a Malagasy and
international audience both scientific and anecdotal information on our efforts to ensure the long-term viability of the 13 species
of lemurs identified in our zones as well as their habitat in the conservation areas around the Mine.
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Ambatovy also monitors and mitigates impacts on other species of mammals besides lemurs, including endemic micro-mammal
and carnivore species. The Ambatovy/Analamay forest complex is home to 38 species of mammals, other than lemurs, and
small carnivores, of which 31 are endemic to Madagascar and seven are exotic (introduced species). Since 2007, Ambatovy has
collaborated with the University of Antananarivo for the implementation of conservation strategies of these mammal species.
The management of mammals other than lemurs aims to:
• ensure the long-term viability of the population of non-lemur mammal species in the Mine area’s forests, through the
implementation of monitoring, surveillance and mitigation;
• contribute significantly to the monitoring and surveillance of the biodiversity which is potentially affected by Ambatovy’s
activities;
• carry out an independent and seasonal evaluation on the condition of non-lemur mammal populations in the Mine’s
conservation forests to assess the corresponding changes.
Amphibians and ReptilesAmbatovy’s areas are home to 89 species of amphibians and 69 species of reptiles.9 The goal of Ambatovy’s amphibian and
reptile management activities is to ensure the continued viability of their populations in Ambatovy’s areas of operation. The
main activities include carrying out pre-clearance inventories and salvaging live animals to conservation forest refuge areas.
Since 2007, Ambatovy has collaborated with the Department of Animal Biology (DBA) of the University of Antananarivo for the
implementation of the amphibian and reptile surveillance and environmental monitoring program.
There are nine species of amphibians and reptiles that have been identified by Ambatovy as requiring specific mitigation efforts
due to their IUCN status: two critically endangered and seven endangered (please see Appendix 3 for a list of priority species).
These species are Mantella aurantiaca, Mantella crocea, Platypelis mavomavo, Brookesia ramanantsoa, Calumma Furcifer,
Calumma gallus, Phelsuma flavigularis, Phelsuma pronki and Uroplatus pietschmanni. For certain amphibians and reptiles,
like the Golden Mantella frog (Mantella aurantiaca), one of Ambatovy’s flagship species due to its critically endangered status,
Ambatovy has developed a successful captive breeding program. For the Golden Mantella, this is the only breeding program
of its kind in the world (breeding and reintroduction), and, to date, it has shown success in the emergence of multiple breeding
ponds, new generations hatched without disease or abnormalities, and data reflecting a high survival rate. During 2016, the
monitoring work of Golden Mantella individuals that were transferred to the Mitsinjo Association’s breeding center in Andasibe
in 2012 continued. The trial resettlement of the Golden Mantella from the breeding center to the natural environment will start
in 2017 in order to assure the conservation of Mantella aurantiaca in the natural environment and to increase the scientific
knowledge of this species. The number of Mantella aurantiaca and Mantella crocea in the conservation area increased in
2016, indicating the long-term assurance of the sustainability of these populations in the lease area of Ambatovy. Furthermore,
the observation of Mantella individuals in the receptor marshes and/or the adjacent forest four years after their release
demonstrates that Mantella can survive there.
Since 2007, the program has manually salvaged (rescued) 8,837 individuals belonging to 70
amphibian species and 25,744 individuals belonging to 57 reptile species from clearing areas.
In 2016, 375 amphibians belonging to 26 species and 1,433 reptiles belonging to 27 species
were rescued in the clearing areas. These salvaging activities have strengthened pioneer
scientific knowledge on the amphibian and reptile world in Madagascar and on the populations
of endangered species. As Ambatovy continues to clear forests for the Mine footprint, salvaging
and translocation activities will continue.
9 An additional three species are currently being confirmed for their scientific names, making a total of 92 species of amphibians. These three species were newly recorded in 2016 because of improvements in our observation methods.
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Environment
Aquatic EcosystemsAmbatovy’s aquatic management program demonstrates the full extent of our commitment to ensuring no net loss of
Madagascar’s unique biodiversity. The aquatic ecosystems of the Ambatovy/Analamay forestry complex consist of 11 rivers that
flow into Ambatovy’s lease area, and eight of them are impacted by Ambatovy’s activities.
Fish species throughout Madagascar were relatively unstudied and little was known about the fish in the river systems and
lakes around the Mine, pipeline and TMF prior to Ambatovy’s arrival. In 2007, Ambatovy initiated scientific surveys of all of
these aquatic systems in all of our impact areas. Ambatovy partnered with leading international organizations to conduct genetic
tests to assess the taxonomic status of fish species. As a result, 16 species belonging to nine families were identified. These
fish species are classified into three categories depending on their characteristics: seven exotic (introduced) species, three
native species, and six endemic species. Among the endemic species are five that are potentially unknown to science; they are
considered and managed by Ambatovy as priority species (please see Appendix 3 for a list of priority species). The population
size of these priority species is very limited and they are vulnerable as a new local endemic species.
Genetic analysis of the five species is ongoing in collaboration with the University of Antananarivo and the South African Institute
for Aquatic Biodiversity to determine their taxonomic status and the extent of their presence in Ambatovy’s areas. Ambatovy has
identified the risks to each of the resident species and designed a series of mitigation measures, including the creation of fish
ponds as refuges from clearing areas and exotic invasive fish species, and support for habitat conservation and restoration.
The Rheocles Mangoro, for example, is a newly discovered endemic fish, which we identified near the Mine Site. In their native
habitat, these fish are sustained by local watersheds and protected from invasive species by natural barriers. Since 2007,
Ambatovy has worked hard to sustain this species using innovative methods for salvaging, creating and restoring habitat, and
for protecting against exotic species.
Bird Monitoring and MitigationThe Ambatovy/Analamay forest complex and the Torotorofotsy Wetlands Ramsar conservation area are home to 118 species
of birds, including four endangered species: Anas melleri, Ardea humbloti, Ardeola idea and Sarothrura watersi. Since 2007,
Ambatovy has been working with national bird experts from Asity Madagascar (an affiliate of BirdLife International, the world
leader in bird conservation) to better understand the avian communities and implement effective management activities. Special
attention is paid to bird species that nest within our clearing areas in order to avoid damaging nest sites until the fledglings have
left and the adults have voluntarily migrated.
The specific objectives of the bird program are to gain knowledge on the specific wealth of water birds, to get an estimate of
the populations’ size from each species of water birds, and to conduct a bird abundance trends assessment. In addition to the
inventories in the clearing areas, the preservation of active bird nests is the main mitigation measure. Once active nests are
identified, they are kept safe from clearing activities until the eggs hatch and the chicks leave the nest by themselves. In 2016,
143 active nests colonized by 18 species of birds were identified in the clearing areas and in the lakes of the sedimentation
pond. These nests were marked and delimited by flags, and monitored until the chicks could leave the nest by themselves.
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Environment
Flora ManagementAmbatovy’s flora management activities are framed within the Flora Management Plan which addresses the three main topics
of flora management: Species of Concern (SOCs, species which are endemic to Madagascar), Orchid Management and the
Herbarium.
For our SOCs, Ambatovy’s mitigation measures include inventories, identification, and salvaging with the help of the Missouri
Botanical Garden. 109 SOCs are located within our conservation areas, and four in our clearing area. Of these species, five
have been identified as “Red SOCs”, meaning that they are only found globally in one specific site, our conservation zone. As
a precautionary measure, Ambatovy’s salvaging program consists of whole plant salvaging (including trees), seed collection,
plant propagation and the development of living collections of progressive mine rehabilitation. Ambatovy has two orchid parks
that house our salvaged orchids as well as a herbarium where individual plants are identified and samples are collected for
taxonomic research.
The Flora Management Plan has been incorporated into the ABMS and the Flora Management Plan cycle was implemented in
2016. The mitigation measure of the SOCs and endangered species in the clearing areas made it possible to inventory 3,833
SOCs and endangered species according to IUCN 2012. For orchids, nine species of orchids have been classified as new for
science.
In 2016, we continued to introduce the SOCs into the Mine zone and salvaged SOCs from the clearing areas directly in the Mine
footprint.
Invasive SpeciesOne of the most significant potential threats to areas of high biodiversity is the introduction of non-native, exotic and invasive
species, which can rapidly adjust to new conditions and have an adverse effect on native biodiversity. We have processes in
place to control these invasive species at the Mine, Plant and port sites:
• Norway rats: We have implemented a six km3 capture zone around five villages near the Mine in order to prevent Norway rats
from affecting the forest and, in 2016, we undertook six eradication campaigns, during which capture activities occurred.
• Crayfish: Crayfish control is implemented twice a year at six sites. Apart from capturing the crayfish in collaboration with local
villagers, who are trained as capturers, we also organize campaigns to raise awareness about the crayfish and their impacts
on agriculture, habitat and biodiversity. There was an increase in the number of crayfish captured in 2016 from the previous
year.
• Asian toads: Throughout 2016, a vigorous effort to remove Asian toads continued. We have joined the Government’s national
committee, which is comprised of several stakeholders, and are working with the Regional Directorate of Environment,
Ecology and Forests (DREEF) in Atsinanana to continue the program against the invasive toads. In 2016, seven eradication
campaigns took place with support from the Department of Animal Biology at the University of Antananarivo.
In addition to addressing invasive toads and other fauna, we are also controlling three exotic plant species at the Mine Site,
including the removal of the Lantana camara species over an area of 42 ha and the removal of exotic pine and eucalyptus trees
over approximately 1,600 ha.
Located off the east coast of Africa, Madagascar is home to more than 1,000 species of rare and often endangered orchids. As part of our commitment to biodiversity management, we systematically survey the Ambatovy mine footprint for orchids. Once identified, they are individually catalogued and conserved for future re-establishment after mining operations cease. Through this work, we have identified approximately 250 types of orchids – 25% of all existing orchids in Madagascar – of which nine are new species to science and found only in our conservation areas. This is an example of how we take careful and innovative approaches to protecting impacted ecosystems for future generations. In 2016, Ambatovy, in collaboration with our partner Missouri Botanical Garden, published a scientific poster on orchid conservation. It received first prize at the Sixth International Orchid Conservation Congress in Hong Kong.
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Environment
OffsetsIn line with BBOP guidance and IFC Performance Standard 6, Ambatovy has developed a multi-faceted offset program
comprising several sites and associated activities. This was deemed necessary given the large scope of our operations, part
of which falls within sensitive high-biodiversity areas. In addition to direct habitat offsets, Ambatovy is currently evaluating the
possible need for priority species offset areas, particularly for the Golden Mantella and endemic fish species.
According to socio-economic studies, households living near the Mine Site areas depend on natural resources and more than
60% live below the poverty line. This state of poverty, coupled with the dependency on natural resources, constitutes a risk not
only for the sustainable management of natural resources but also for the sustainability of expected benefits for the biodiversity.
Since we know that we cannot effectively accomplish the sustainable management of these forests without the support and
participation of the local population, we work closely with local communities and have implemented several community activities.
To support sustainable forest management, Ambatovy has designated some areas for conservation and others for mixed-
use. We are also working with community-based associations, or COBAs, to promote wardenship of forest segments as well
as to decrease the economic reliance of local communities on the forest through other income-generating activities, such as
aquaculture, eco-tourism, livestock breeding (small animal husbandry), and spice cultivation. In 2016, the production of plants
from village nurseries represented 26,835,400 Ariary (approximately $ 9,100 US). In addition, two cooperatives from three
communes (Ambohibary, Andasibe, and Morarano) have been processing and recycling the wood from the Mine’s clearing site
since 2008. Poultry farming, another income-generating activity, has been initiated with three COBAs.
Ambatovy’s offsets include the Mine Conservation Forests, the Analamay-Mantadia Forest Corridor, the Ankerana Forest and
the Torotorofotsy Wetlands Ramsar Site. Combined, these areas come to a total of more than 14,000 ha, or roughly 9x the size
of our Mine area of approximately 1,600 ha.
AMBATOVY NET IMPACT OF MINING ACTIVITIES ON FORESTED AREAS
FOREST/LAND AREASLAND TO BE
IMPACTED (ha)LAND TO BE
RECLAIMED (ha)LAND TO BE
CONSERVED (ha)Mine Footprint* 2,154 2,154 0
Slurry Pipeline 600 600 0
Roads/Infrastructure 100 0 0
On-Site or Adjacent Offsets*
1. Mine Conservation Forests 0 0 3,582
2. Analamay-Mantadia Forest Corridor (CFAM) 0 0 3,490
Ankerana Forest (BBOP area) 0 0 5,715
Torotorofotsy Wetlands Ramsar Site 0 0 1,597
SUB TOTALS 2,854 2,754 14,384
*The Mine Footprint includes the mine area as well as the buffer zone.
Mine Conservation ForestsTwo parcels of azonal forest overlapping the ore body have been set aside and will not be mined, despite the valuable nickel
lying beneath them. The combined area of these two parcels is approximately 300 ha. During the Environmental and Social
Impact Assessment, these azonal forest habitats were considered to be a rare habitat type compared to the more typical
zonal forests of the Eastern Forest Corridor. In addition, we have more than 3,300 ha on-site of transitional and zonal forests
dedicated to conservation. The conservation zone provides a buffer for receiving the fauna leaving the mine footprint and serves
as a seed bank to facilitate ecological restoration of the mine footprint.
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Analamay-Mantadia Forest CorridorThe Analamay-Mantadia Forest Corridor (CFAM) will be part of a proposed new protected area that will ensure habitat
connectivity between existing conservation areas in the region including forests around the Mine managed by Ambatovy,
the Ankeniheny-Zahamena Corridor (CAZ), the Mantadia National Park and the wetlands of Torotorofotsy. Formal protection
of this corridor, spanning approximately 8,000 ha in size, will result in the creation of one of the largest continuous expanses
of protected habitats in Madagascar (over 450,000 ha) that includes several endangered species such as the critically
endangered Diadem sifaka (Propithecus diadema). Ambatovy continues to support the establishment of this larger, new
protected area, which will be called the Torotorofotsy-CFAM Complex New Protected Area. We have also supported
patrolling activities of the local NGO, GERP, in order to maintain threats at the minimum level, pending the Government
appointment of a site manager. Of particular importance, the creation of this larger, new protected area will ensure
protection of a surviving population of the critically endangered Greater bamboo lemur (Prolemur simus), one of the rarest
lemurs in Madagascar and on the list of the top 25 most endangered primates of the world. According to recent surveys
conducted by GERP, with support from Ambatovy, the CFAM area contains about 50-70 individuals of this species or 10-
20% of the known wild population.
Ankerana ForestAnkerana is the centerpiece of our Business and Biodiversity Offsets Program. Ankerana is an intact area of low-to-medium
altitude forest lying 70 km to the northeast of the Mine and is linked to the Ankeniheny-Zahamena Corridor (CAZ). It is
continuously threatened by local activities, such as slash-and-burn agriculture and poaching. However, since Ambatovy
began working in the area in 2011, the number of documented threats has significantly declined. The site has a total surface
area of approximately 8,000 ha, of which 6,800 ha serve as a core protection zone. We work closely with the communities
on the outskirts of this offset site through education programs and through support for the COBA organizations to ensure
that our efforts to protect and maintain the delicate ecosystem continue beyond our operations. An agreement was signed
between Ambatovy and Conservation International (CI) for the protection of the Ankerana Forest in September 2015. We
feel that working with respected organizations such as CI at our offset sites brings additional expertise and credibility to
managing biodiversity.
Torotorofotsy Wetlands Ramsar SiteThe Torotorofotsy Wetlands lie immediately to the east of the Mine and cover
10,064 ha of wetlands, forest and other habitats. In 2006, Torotorofotsy
was classified as a wetland of international importance under the Ramsar
Convention on Wetlands.10 We support local community associations
by reinforcing management capacity and sharing activities that help stop
marsh transformation and degradation. The day-to-day management of the
Torotorofotsy Wetlands was transferred to Asity Madagascar, with a signing
of an agreement between Ambatovy and Asity Madagascar for the protection
of the new protected area in September 2015. In 2016, Ambatovy supported
Asity Madagascar both financially and technically for controlling site patrols,
developing income-generating activities, and carrying out awareness raising
campaigns – all of which are necessary to maintain the habitat quality of
the sites. Specialized studies and ABMS programs are still carried out by
Ambatovy.
10 Entered into force in 1975, the Ramsar is the oldest modern global intergovernmental environmental agreement negotiated by countries and non-governmental organizations concerned about the increasing loss and degradation of wetland habitat for migratory water birds.
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Restoration to a Sustainable LandscapeAmbatovy plans to restore a multifunctional forest over the Mine’s footprint through progressive reclamation and replanting.
Ambatovy currently has an Orchidarium, a research nursery and a production nursery, and has supported the creation of five
community nurseries that supply us with 250,000 plants per year for our restoration activities.
Ambatovy has been conducting reforestation trials since 2010 to determine the best combination of flora and soil to successfully
re-vegetate the Mine area. In 2016, 9.78 ha of land impacted by construction and transport infrastructure surrounding the Mine
Site were successfully rehabilitated bringing the total rehabilitated area to 20.03 ha thus far.
In 2016, World Wetlands Day was celebrated in Andasibe on February 2nd, under the theme “Wetlands for our Future.” The celebration provided an opportunity for authorities and partners to visit the Torotorofotsy Wetlands Ramsar Site, the manager of which, Asity Madagascar, is being supported by Ambatovy. Torotorofotsy’s forest figures among Ambatovy’s offset sites, which are part of the mitigation measures aiming at having biodiversity gains from the environmental management at the Mine. Ambatovy provides support to Torotorofotsy’s Management Plan in several ways, including monitoring of the physical and biological environment, scientific research and modeling, support for the resolution of management conflicts, development support for surrounding communities, and conservation actions. The collaboration agreement with Asity Madagascar was signed in 2015, detailing Ambatovy’s financial, technical and monitoring support for the conduct of activities provided for in the BBOP’s and the IFC Performance Standards’ biodiversity offset programs. The activities mentioned in the agreement allow for maintaining the quality of the site’s habitats and the sustainable use of environmental services and benefits by the local population.
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Environment
Environmental Management Water As the global population swells, the demand for fresh water continues to grow and societal concerns about water quality and
availability increase. We understand and share these emerging concerns.
Water is central to our metallurgical process for producing nickel, and we manage it carefully. At both the Mine and Plant Sites,
we conducted baseline studies, continue to assess risks, and have ongoing engagement with stakeholders to inform them of our
water management planning.
Our comprehensive Water Management Plan is therefore designed to:
• Ensure that all phases of our operations do not adversely affect surface and groundwater quality, and that any wastewater
complies with environmental standards.
• Monitor the flow rate and quality of surface and groundwater downstream of mining activities to detect any abnormalities.
• Ensure that Torotorofotsy Wetlands and sensitive aquatic ecosystems are not adversely affected by the activities at the Mine
or along the pipeline.
• Communicate with downstream users to ensure their water needs are met and propose solutions if problems arise.
• Ensure that domestic water supply and sewage treatment meet the criteria of applicable water quality regulations and
guidelines.
The Mine’s Operational Plan is designed to ensure that runoff from mining excavations flows into sediment retention basins,
lowering potential impacts on the sensitive watersheds around the Mine. Water runoff collection ponds and flow allowances are
designed to meet the World Bank and Malagasy regulations on water quality. Indicators monitored at 17 sites around the Mine
include such measurements as total suspended solids, pH, heavy metals, and coliform bacteria.
Annual water requirements for ore preparation at the Mine represent about 0.5% of the mean annual flow of the Mangoro River;
during the dry season, Ambatovy’s water withdrawal does not exceed 2% of the water flow. Water is mixed with ore to create
slurry for transport down the pipeline.
At the Plant Site, water is recovered from the ore slurry and it is augmented with withdrawals from the Ivondro River. A portion
of the effluent discharge from the Tailings Facility (up to 300m3/hr or approximately 9% of our total estimated withdrawals) is
available to be utilized in the process, if required. The use of processed water at the Plant is primarily for cooling water and
boiler-feed water. All process water is discharged to the TMF and treated through neutralization.
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Water QualityAmbatovy’s Water Quality Monitoring Program covers the analysis of surface water, ground water, and seawater. We conduct
semi-annual monitoring trips throughout the Plant while key areas are monitored weekly. All of our water quality standards are
established through reference to Malagasy regulations, IFC environmental health and safety guidelines for mining, and the
World Bank’s Pollution Abatement Manual.
WATER WITHDRAWALS DURING OPERATIONS, 2014-16
SOURCE ACTUAL AMOUNT (m3)
2014 2015 2016
Mangoro River 8,124,629 6,141,629 7,351,284
Ivondro River 17,802,811 18,870,849 18,370,158
Antsahalava Creek - 2,413,160 1,530,508
Groundwater - 477,555 531,724
We reported approximately 27.8 million m3 of water consumption in 2016, which is consistent with prior years. Water for
our processes is withdrawn from a variety of sources at the Mine, Plant and port facilities, including the Mangoro River, the
Ivondro River and groundwater wells. As reported last year, to mitigate for increased chromium levels detected as a result of
ore leaching runoff, especially prevalent during the rainy season, Ambatovy began pumping from the Antsahalava Creek. This
mitigation measure will remain in place until the construction of a more sustainable solution is completed. Implementation of the
permanent measure is expected in 2017. Our water withdrawal is monitored quarterly by our regulator, the ONE.
EnergyThe majority of the Mine Site power requirements are supplied from a nine-unit diesel generator power station, with an average
load of approximately 6 MW. The Plant Site utilizes three coal-fired boilers coupled to a three-unit steam turbine power
generating station to supply the electricity needs of the process plant in Toamasina. The average plant load is approximately
60 MW. In addition to the steam turbines, the three coal-fired boilers provide process steam for the metallurgical production
process. The process steam from the coal boilers is supplemented by the waste heat boilers in the two acid plants, and
additionally from process flash steam that is reused in process areas. Process steam is generally used to heat slurries
and process solutions to ensure that the plant processes operate efficiently. There are approximately 40 emergency diesel
generators installed throughout the Plant that are used to back up critical plant equipment.
In order to contribute to the fight against the erosion and silting of the Mangoro River, from which we draw water for our operations at the Mine Site, in 2016 Ambatovy launched an important set of activities in collaboration with Prodaire (Projet de Développement de l’Approche Intégrée pour promouvoir la Restauration Environnementale), a program that is funded through the Japanese International Cooperation Agency (JICA). Through the application of Prodaire’s “LIFE” model, which promotes collective efforts for rural development and environmental protection, the activities focus on reforestation and the fight against lavaka along the Mangoro River (“lavaka” is the Malagasy word for “hole”, usually found on the side of a hill or on slopes; it is a type of erosional feature common in Madagascar). The work is taking place in three fokontany of the Rural Commune of Andaingo and will continue for two years, from October 2016 to September 2018. Field activities are being implemented by a local NGO, Ezaka Vaovao, which has already worked with Prodaire in other phases.
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In 2016, we consumed the following amounts of energy:
ENERGY CONSUMPTION, 2016
PRODUCT CONSUMPTION (MWh)
Electricity from coal 528,833.00
Electricity from diesel 63,973.30
Emissions,Effluents,andWasteAmbatovy’s Waste Management Plan was developed to put in place the necessary measures and procedures for correct
collection, transportation, storage, and disposal of waste. The main objective is to ensure that it is handled in a safe, efficient
and environmentally secure manner. Waste material ranges from industrial waste, such as scrap metal and wood, to domestic
waste, such as food or office scraps. Ambatovy’s waste management strategies consist of minimizing waste production, and
constantly improving recycling programs.
At the Mine, solid waste is sorted and disposed of in a number of ways. Vegetable food waste is sorted for composting, while
meat waste is incinerated. Paper, plastic and wood are all sorted for recycling.
MINE SITE WASTE MANAGEMENT, 2016WASTE TYPE QUANTITY METHOD OF ELIMINATION
Domestic/Operational Waste (e.g., food, plastics, cartons) 3,176.70 m3 Incinerated
Domestic/Operational Waste (e.g., ashes, sludge, fats) 531.00 m3 Buried in landfill at waste dump
Rags and Contaminated Soil 921.80 m3 Incinerated, compostedTires 209 units Recycled by a local company
Wood 553.50 m3 Donated to Community-basedassociations (COBAs)
Oil 459.3 m3 Sent to Total
At the Plant, waste is mainly composed of ordinary and industrial wastes. They are sorted and minimized straight from the
source. Waste management is ensured through the Waste Management Area located at the Plant Site, the landfill area at TMF
level and recycling companies.
Waste sent to the landfill site in 2016 decreased compared to 2015, from 70,945 m3 in 2015 to 64,227 m3 in 2016, representing
a reduction of almost half since 2012 (122,373 m3). Waste sent to the landfill site is composed of 67.5% industrial waste,
23% bottom and fly ash, and 9.2% general waste. In general, 14 tons of food waste is composted per month and 25 tons are
incinerated, for a total of 164 and 294 tons, respectively in 2016. Note that the amount of recycled waste in 2016 now reaches
63% of the generated wastes and is 10 times higher than in 2012.
PLANT SITE WASTE MANAGEMENT, 2016
WASTE TYPE QUANTITY METHOD OF ELIMINATION
Domestic/Industrial Waste
64,227 m3 Landfilled
294 t Incinerated
3,175 m3 (wood, plastic) Recycled
62,946 t (fly ash for cement) Treated on site (composted or landfarmed); sent to Holcim
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Environment
We have integrated our recycling needs with our commitment to support local businesses and community development. For
example:
• Ambatovy has a certain amount of used wood, such as wooden pallets or boxes used to pack materials. This wood can
be recycled and converted into valuable finished products, such as office furniture, desks and benches for schools, as
well as compressed chip briquettes for fuel use. Currently, two associations located in Toamasina (the CCS and the NGO
Saint Gabriel) recycle these used woods. 1,726 m3 of used wood was
recycled in 2016, making a total of 3,179 m3 since we started working
with them. This arrangement has created 38 local jobs and offers
training to students from poor families in the region. Ambatovy also
provides mentorship sessions on Health, Safety and Environment
standards and on business management practices. Towards the end
of 2016, a new initiative for the recycling of wood at the Mine Site
began with the local farmers’ association FIMIAM. Like the project in
Toamasina, it aims to make use of used wood to help preserve the
environment, provide income generating opportunities for members of
the association, donate needed wooden furniture and equipment to the
commune, and contribute to the creation of employment for youth. Four
agreements were signed between FIMIAM and its partners in mid-
December to get this initiative underway.
• For plastic recycling, Ambatovy works with ECO Aide, a local company and the only plastic recycler in Toamasina, for
shredding and recycling plastic waste (composed of bottles, big bags, and jerry cans/drums). In 2016, 1,449 m3 was recycled
and transformed into raw materials to be used for manufacturing domestic items (cups, bowls, buckets, etc.). The company
also bought a machine to be able to produce plastic pellets used by plastic tool manufacturing industries. This business has
created 10 permanent jobs.
• Old tires from the Mine Site that are no longer usable are also being recycled. A local company located in Moramanga,
Construction and Services Society (SCS), started this recycling activity in January 2016. Approximately 200 old tires were
delivered to the company during the year and converted into rubber gums, automotive parts (e.g., silent blocks, brake
linings), and decorative items (e.g., carpets). SCS employs 8 people for this activity.
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Environment
Hazardous WasteAmbatovy does not ship any waste out of the country. Chemical waste is neutralized on site. Paints, hydrocarbon waste
and batteries are recycled and treated by local companies. The Waste Management Area at the Plant Site is able to handle
incineration, separation, and encapsulation for stabilizing hazardous waste materials.
OverburdenOverburden is composed of pieces of rock and soil with uneconomic concentrations of nickel and cobalt. At Ambatovy, ore is
delivered from a surface pit to the Ore Preparation Plant (OPP), which is designed to separate waste material from the ore and
to produce the slurry. The ore from the trucks is dumped into a bin, screened, and conveyed to the primary scrubber. Mined
materials that are rejected as waste are handled accordingly.
MATERIAL EXTRACTED, 2016
MATERIAL AMOUNT (tonnes)
Ore* 6,076,000
Waste 2,141,000
Total 8,217,000
*Includes processed ore and stockpiled ore.
MaterialsIn addition to approximately six million tonnes of ore that will be mined annually, the operation of the process plant requires four
key raw input commodities. The amounts of these commodities consumed during the year are as follows:
MAJOR COMMODITY CONSUMPTIONS, 2016
COMMODITY AMOUNT (tonnes)
Coal 487,259
Sulphur 510,229
Limestone 1,327,865
Ammonia 41,523
TailingsWe have designed and currently operate our TMF to meet or exceed all applicable regulatory requirements. It was also
designed to meet the requirements of the Canadian Dam Association, the International Commission on Large Dams, and the
Mining Association of Canada’s Towards Sustainable Mining (TSM) Tailings Management protocol. Ambatovy has a Tailings
Review Board and we work with external consultants, when necessary, for additional technical expertise.
The TMF is a long-term construction project involving a continuous raising of the perimeter dams to meet capacity needs.
The first two phases of Ambatovy’s TMF are currently operational. The detailed engineering of the third phase was completed
in 2016. A significant amount of construction was also completed during the year to ensure the TMF is being developed
in accordance with the engineering plan. There was one independent review and four audits of the project in 2016. Once
construction is complete, the TMF will provide sufficient storage capacity for the remaining Mine life.
The TMF is designed to receive the neutralized solids from the extraction of nickel and cobalt. Once the solids settle to the
bottom of the ponds, the liquid is discharged into the ocean through a diffuser that ensures maximum mixing and dilution. In
2016, the total amount of liquid and solid tailings was 23,535,361 tonnes.
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Environment
In 2016, there continued to be concentrations of manganese in water that seeped from the TMF that sometimes exceeded the
threshold established by the ONE. Manganese at low concentrations poses only aesthetic concerns; that is, its presence in
drinking water, like that of iron, may lead to the accumulation of deposits (black deposits) in the distribution system. At higher
concentrations, it can have adverse health effects. To safeguard the public’s health, we provided bottled water to residents
who may use nearby water sources for drinking water, and gave regular water quality updates to residents and our regulator.
Based on the findings of a root cause analysis of the issue, we began implementing corrective actions – as per the Manganese
Action Plan, which was finalized in 2016 – including building up tailings beaches to reduce the manganese before discharge
and installing permanent pumping houses in order to regain compliance with our permit requirements. In 2016, the Sustainability
team distributed 1,096,779 liters of water to 190 households (896 people) in the 14 villages directly impacted by this problem
as a short-term measure. A permanent, alternative water supply system for local residents has been designed and construction
work was expected to be finished in the first half of 2017. In the meantime, we are continuing to work on eliminating the
underlying problem altogether.
EmissionsWe have selected the following five major inputs used in our operations that are sources of greenhouse gases (GHGs) for
monitoring: diesel, coal, naphtha, limestone, and liquid petroleum gas (LPG). These are contributors of carbon dioxide, methane
and nitrous oxide.
GHG emissions for the Mine, Plant and port facilities were estimated at a combined total of 1,884 kilotonnes (kt) of CO2
equivalent during 2016, representing a 7% decrease over 2015 emissions. The decrease is mainly the result of several
maintenance shutdowns. As there is a lack of reliable, large-scale power available in Madagascar, the use of coal for power
generation accounts for the majority of GHGs produced. Ambatovy consumed 3,551,782 gigajoules (GJ) of energy in 2016 from
a mix of coal-fired power plant and fossil fuel burned.
The release of GHGs related to transportation is, unfortunately, unavoidable in a project the scale of Ambatovy. However, we
have aimed to reduce the use of local road traffic wherever possible:
•We chose a strategic location for the Plant Site, close to the Port of Toamasina, to lower the cost and environmental impact of
transportation of products coming in and out of the Plant.
• The pipeline ensures that the ore coming from the Mine to the Plant Site is transported safely and with a relatively small
environmental impact. Most of the energy needed to transport the ore slurry comes from gravity as there is a gradual
decrease in elevation of approximately 1,000 meters from the Mine down to the Plant Site.
•We have a fleet of buses that transport workers to and from our Mine and Plant Sites. This ensures that the cost of
transportation is not a burden on our local employees, while also reducing individual transportation footprints.
• At the port, we monitor all our unloading operations to ensure that the commodities we bring in do not have a negative effect
on the town and the marine life in the harbor.
• All of our imported commodities are transported from the Port to the Plant by rail to further lower impacts on the environment
and the local community.
•We recently introduced electric buses and vehicles for transporting workers and stakeholders around the Plant Site. The
buses and vehicles are less expensive to run and maintain, as they do not consume any diesel or lubricants, but instead use
electricity produced at the Plant. They also do not create harmful emissions and use solar panels to extend their charge.
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Environment
Air and Noise MonitoringAmbatovy regularly monitors sulphur dioxide, hydrogen sulphide, ammonia, dust particulates and ambient noise. As we
continue to increase our production activities, our air monitoring systems in place have been extremely helpful to understand the
emission levels, both in terms of air quality and noise, to ensure we remain below established acceptable thresholds.
Although an increase has been noted over the past two years in air emissions and noise, the increase has not exceeded
the permissible emission criteria. In 2016, we experienced five reportable air quality-related incidents that exceeded normal
operating conditions on a short-term basis or that related to equipment failures with no identified offsite air quality impact. No
employees or community members were harmed while these incidents occurred or while they were addressed.
Environmental Spills and IncidentsAmbatovy operates an integrated reporting system for all environmental, health and safety, and security incidents. Spills and
incidents are tracked and documented as part of the internal compliance reporting process using the guidelines below. In 2016,
no significant spills or releases occurred at Ambatovy.
ENVIRONMENTAL INCIDENT CRITERIA
LEVEL CRITERIA
1 • An unpermitted release into the environment that does not meet the threshold for levels 2-5.
2
• An unpermitted release to the environment equal to or in excess of regulator threshold.
• A permitted emission that exceeds the emission criteria.
• Direct physical activities causing biodiversity loss.
• In the absence of a regulator threshold, a spill column threshold of 25 kg for toxic substances, 500 kg
for all other substances except air, uncontaminated water, C02, methane, ethane, hydrogen, nitrogen,
and other inerts.
3 • A release of materials that poses a threat to the environment or to the health and safety of the public.
• A release that results in an external complaint.
4• A release that results in the evacuation or shut-down of non-company-owned facilities; restricts the use
of public roads or highways or navigational and recreational use of water-ways; or adversely affects a
drinking water source.
5• A release of material that causes persistent, severe off-site environmental damage extending over a
large area.
• Ecological disaster.
*A release can be a solution, particulates, noise, or induced fog.
Ambatovy has introduced two electric buses for transporting workers and stakeholders around the Plant Site. The benefits of electric transportation are many. The buses are less expensive to run and maintain, as they do not consume any diesel or lubricants, but instead use electricity produced at the Plant. Electrical vehicles do not create harmful emissions and use solar panels to extend their charge. Maintenance is limited to keeping the buses clean, greasing the suspension and checking the battery water levels on a weekly basis. Electrical buses are also safer since their speed is limited to 30 km/hour and their large windows ensure greater visibility, so drivers can clearly spot nearby pedestrians and other potential road hazards. In the coming years, we will look to expand this emission-reducing initiative, which has already yielded a range of cost, safety and environmental benefits.
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Labor
LABOR GOALS 2016 RESULTSMaximize local workforce composition to
have 85% of positions held by nationals Ambatovy had an average of 90% national workforce (direct and indirect).
Maximize the internal promotion rate to
higher than 10%
Ambatovy had a 6% internal promotion rate due to a recruitment freeze as part
of our cost-cutting measures.
OverviewOur business cannot operate and thrive without a dedicated, experienced and engaged work force. Indeed, we recognize that
our employees are our most valuable asset and that our performance depends on a skilled and committed work force, respect
for our employees, effective team work and a culture of safety. For our operations phase, we need a team that can meet the
engineering, maintenance, technical, administrative and program aspects of our business. We believe that we can create this
team by ensuring that our workforce benefits from more than just a paycheck, by providing a rewarding and satisfying work
environment. We have a number of policies and strategies for several core areas to ensure Ambatovy is an employer of choice
in Madagascar. These areas include local recruitment, training and capacity-building, internal communications, knowledge
transfer, labor-management relations, performance management, health and safety, and diversity in the workplace.
Our labor practices affect not only our employees but also our sub-contractors, as we both request and require that they comply
with specific internal Ambatovy policies, such as Health and Safety and Zero-Tolerance.
WorkforceLocal RecruitmentWe have two employment commitments: to optimize national employment and to develop a highly-skilled workforce in
Madagascar. By locating our processing facilities in Madagascar, we have chosen to invest in the long-term recruitment,
employment, and development of human capital in the country. Our recruitment policy aims to attract and retain Madagascar’s
top talent through competitive compensation and benefits. Our success will depend on recruiting a cohort of employees that are
committed to our vision, values, and long-term operation.
Ambatovy is creating direct and indirect jobs as a result of our presence in Madagascar as well as our decision to extract and
refine in country. Ambatovy employs, directly and indirectly, roughly 8,000 workers, 90% of whom are Malagasy. Due to the
Mine ramp up program and the need to ensure constant production, in 2016 Ambatovy initiated a recruitment program targeting
individuals with very specific technical skills (with some positions to be filled through promotions and role changes, others
through new recruitment).
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Labor
APPROXIMATE PROJECT WIDE MANPOWER, DECEMBER 2016
NATIONAL EXPATRIATE TOTAL
Direct Employees 2,904 203 3,107
Operational Contractors 4,391 574 4,965
Total 7,295 777 8,072
EmployeeBenefitsandWagesAmbatovy aims to be an employer of choice in Madagascar. Our Malagasy employees are offered competitive wages and
benefits, including innovative programs that target some of the challenges they may face. Ambatovy’s standard entry-level
wage is significantly above that of the national minimum wage for entry-level unskilled labor. The company also offers training
programs and opportunities for advancement as well as review-based pay increases and production incentives.
Ambatovy offers a number of attractive benefits in order to promote a positive working environment and the well-being of our
employees. Permanent employees are eligible for:
• A social benefits program, which includes health, death, accident, and disability insurance as well as a retirement program.
• Performance bonuses.
• Production Incentive Program: certain employees are eligible to receive a variable monthly bonus based on achieving our
daily production and safety goals.
• Support for career development: all employees are given bi-annual performance reviews to reinforce their skills and to
suggest areas of improvement; training opportunities are also available for employees to strengthen or develop new skills
valuable to the organization.
• Vacation leave.
• Retirement benefits.
All employees are eligible for medical coverage and accident insurance. The company will also cover expenses and repatriation
services for funerals in the event of death of an employee, and will provide leave and a traditional payment in the event of the
death of a close relative.
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Diversity in the WorkplaceAt Ambatovy, our policy is to find the right person for every job, regardless of gender, race, ethnicity, or religion. While we do
emphasize local employment as a priority in our hiring practices, positions are filled by the candidate that best suits the required
experience and necessary skills. Salary remuneration is directly tied to the position’s responsibility and accountability, and is
not determined by gender or age. Although typically a male dominated environment, Ambatovy has, over the years, seen a
steady increase of women in traditionally male positions, including electrical technicians, geologist leaders, forestry engineers,
millwrights, and electrical motor repair technicians. By the end of 2016, approximately 13% of our direct employee workforce
was female, and 3% of non-administrative roles company-wide were filled by women.
AGE AND GENDER DIVERSITY PER EMPLOYEE GROUP FOR DIRECT EMPLOYEES, 2016
Age Group Under 30 30-50 Over 50
Gender Male Female Male Female Male Female
Expatriate 5 0 117 12 64 5
National 496 105 1,883 270 144 6
Training, Capacity Building and Skills TransferAmbatovy offers training programs in safety, mining and processing operations, maintenance trades and leadership to ensure
the skills needed for excellent performance. We utilize a range of methodologies including computer-based learning, classroom
and on-the-job instruction. In addition, expatriate team members are required to transfer knowledge and skills to Malagasy
team members to build capacity and enable ongoing career progression. In 2016, our employees spent 120,228 man-hours in
training.
Skills training at Ambatovy is centered around SkillMine, an integrated competency tool that provides all employees access
to training in the most cost and time-effective manner. Its counterpart, the Learning Management System, also provides for
competency development and validation for the operators, guaranteeing that the business has a workforce that is skilled and
can run the Plant safely and effectively. With these programs, employees participating in the program can access content, learn,
track their progress, and evaluate their knowledge and skills through computer evaluation and hands-on practice.
Ambatovy believes a strong, supportive leadership culture is essential for our success. In 2016 we introduced our Talent
Management Program to identify and develop Malagasy employees with high-potential for future leadership. The program
includes leadership assessment, individual development plans and succession planning, supported by coaching, mentoring and
networking activities, as well as formal leadership training.
A key strategic objective for 2016 was the implementation of the “Seizing Opportunities Together” program to enhance employee
understanding and engagement. This program is for all Ambatovy employees, utilizing an engaging visual learning tool in
an interactive session, guided by internal facilitators. Through these discussions, employees not only learn about Ambatovy
business and strategy, but also increase their understanding and appreciation about Ambatovy and Sherritt, our operator,
which ultimately reinforces their engagement. 2,129 employees completed the session in 2016, representing 70.85% of our
employees, surpassing the original objective of 66%.
Another component of our training program is the cultural awareness sessions. With employees from over 40 different countries,
ensuring better understanding between employees from different cultures is essential for collaboration and team work.
Ambatovy provides information on Malagasy culture for expatriates on arrival to Madagascar, and all expatriate and Malagasy
leaders participate in the cultural awareness training program to promote mutual understanding and tolerance of each other.
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TRAINING PROGRAM, 2014-162014 2015 2016 2014 2015 2016
Subject Man Hours TraineesHealth and Safety 58,629 48,017 44,690 5,286 5,099 4,400
Maintenance 29,007 42,389 47,066 1,208 847 1,662Operations 7,501 2,973 4,060 239 497 160
Administration 21,712 14,871 23,109 1,089 899 739E-Learning 1,438 498 1,303 1,481 1,425 382
Total 118,287 108,748 120,228 9,303 8,767 7,343
Training is an integral part of our commitment to health and safety. Recognizing this, Ambatovy purchased a heavy-equipment simulator in order to train the operators of some heavy machinery at the Mine Site, including large trucks and excavators that have been recently purchased, so as to be able to continue ramping up production at the Mine site. Effective training is critical for safe and efficient production, but also supports proper care of costly mobile equipment. The simulator is the only one of its kind in Madagascar. It is built into a shipping container and includes high-performance computers, software, projectors, screens, a motion platform with six degrees of freedom, an instructor’s station, and interchangeable mobile equipment scenarios that simulate the mining environment and a number of conditions and events that an operator may face on the job. It takes 36 hours of simulation for a new employee to experience different operating conditions at the Mine Site. Beyond giving operators first-hand experience of driving heavy machinery in various situations in a safe environment, the simulator contributes to the goal of improved productivity through a high-performance workforce – one of the key factors in achieving organizational effectiveness across the company.
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Labor-Management RelationsOne of our core values is teamwork. We believe that in order for us to be a successful enterprise, all employees must work
in a spirit of mutual respect, trust, and constructive relationships. In no other relationship is this as important as it is for labor-
management relations. Four principles ensure that this relationship is indeed constructive and respectful:
• Fair treatment of every employee
• Respect and integrity for and by all employees
• Respect for privacy and confidentiality
• Nurturing Malagasy talent
By upholding these principles and working with a spirit of effective dialogue, we are confident that our labor-management
relations can be constructive, steering the company towards success as we enter our long operations phase.
New employee representatives were elected to the Work Council in mid-2016 and will serve for a two year period. The main
objective of the Work Council is to collaborate with all stakeholders in order to have an efficient dialogue between the employer
and employee representatives. Progress on the Collective Bargaining Agreement was on hold in 2016 with discussions set to
recommence in the beginning of 2017 with the newly elected Work Council members and Ambatovy Management. Once in
place, the Agreement will apply to all national employees for DMSA and AMSA.
In addition to this important role of fostering dialogue, the Work Council aims to renew employees’ sense of belonging to the
company in order to ensure that Ambatovy remains an employer of choice in Madagascar. Towards that end, the Work Council
initiated several activities in 2016 including the start-up of some sports activities (football, volleyball, pétanque, etc.) in order to
bring employees together and to encourage team work; the organization of a Talent Show to highlight employees’ talents and
to make Ambatovy a fun and pleasant place to be; the re-introduction of the Food Committee in order to monitor the quality of
catering services; and a review of the health care coverage provided by Ambatovy and employees’ co-payments. The Work
Council will continue to act as a partner with Ambatovy Management in order to improve the social and employment conditions
of employees so that, as per the Work Council motto, “Together, let us aim for the best – for our company and for each
employee”.
Seven grievances relating to working conditions were reported in 2016, an increase over the two that were filed in 2015. Three
cases related to requests for salary increases, two were complaints against direct supervisors, and the other two involved
harassment claims that were eventually determined to be invalid. All seven were addressed and resolved during the calendar
year.
There were no work stoppages as a result of labor unrest in 2016.
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Health and SafetyAmbatovy is committed to maintaining a healthy and safe work place for all employees, contractors, visitors and neighboring
communities, and health and safety is our top priority. We believe that all injuries and occupational diseases are preventable.
Our Health and Safety (HS) team oversees training, work authorization and reporting for occupational incidents and diseases.
We report health and safety performance on a continuous basis to management in order to ensure safe operations and
improvement. Our recording and reporting system is compliant with the International Labor Organization’s Code of Practice on
Recording and Notification of Occupational Accidents and Diseases.
There were several changes and improvements made to our health and safety program in 2016 because of the fatalities and
Lost Time Injuries (LTIs) that occurred in 2015. An HS Plan was developed that was designed to increase hazard awareness,
improve performance and strengthen safety culture. It includes leader walks around sites to set the tone from the top, proactive
health and safety communications activities, workplace inspections, training and standards development. As a result of these
efforts, we significantly improved our health and safety performance from 2015 to 2016. There were no work-related fatalities at
our sites during 2016 and, in September, we reached an important milestone of twelve months without recording a single LTI.
This was the first time in our project’s history.11
The introduction of three initiatives, in particular, helped us reach that level of performance: “safety interactions”, “leadership in
the field” and “significant potential incidents” (SPIs).
“Safety interactions” are moments throughout the day during which discussions on behaviour related to health, safety and
compliance with procedures take place. On average, 10,000 interactions per month were recorded in 2016. All Ambatovy
leaders at the supervisory level and above were required in 2016, as well as in 2017, to have a certain number of safety
interactions with their colleagues, depending on their role and position, and to incorporate them into the Ambatovy Incident
Management System (AIMS). We have found that the safety interactions have been extremely helpful to bring about behavior
change, improve practice, and encourage a mind-set change about the importance of health and safety; they also reinforce the
important message that “safety begins with me”.
11 By the end of the year, however, we had one LTI, one restricted work case and 14 medical treatments.
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“Leadership in the field” is a new Ambatovy initiative that started in the second quarter of 2016. It is a dedicated time for leaders
to spend in the field interacting with employees to give positive reinforcement or to discuss opportunities for improvement in
terms of daily safety behaviors and respect for procedures. The time is used to set, establish, and reinforce expectations on
critical safety issues and to review our performance in key safety areas. It also allows time for employees to interact with their
leaders and to express their opinions and concerns. The aim is to ensure there is two-way communication of expectations,
concerns and ideas in order to improve the safety of everyone who works at Ambatovy. Some of the topics discussed during
2016 include: Take 5 (take five minutes to think about safety before doing the job), first aid responders, line of fire, Fatality
Prevention Standards, housekeeping, etc.
2016 was the first full year that we recorded “significant potential incidents” (SPIs), defined as actual or near-hit incidents that,
under different circumstances, could have reasonably resulted in at least one fatality. There were 16 SPIs reported over the
course of the year at Ambatovy. They were investigated in the same manner as fatalities. Detailed investigations to understand
the cause(s) of each incident were completed, and actions to prevent recurrence were identified and implemented. The most
common types of SPIs in 2016 related to light vehicles, heavy mobile equipment, and working at heights
Our Senior Management team is confident that the important work done in 2016 will continue to support the further development
of our safety culture and will reduce the exposure to potential critical risks for our workers and contractors. Efforts in 2017 will
focus on:
• Implementing 11 Fatality Prevention Standards;
• Continuing to report and investigate SPIs to learn from high risk, near-miss incidents;
• Aligning HS standards and practices between the Mine and Plant Sites;
• Enhancing the quality of safety interactions, and tracking them through leaders’ Key Performance Indicators;
• Holding our contractors accountable for adherence to the same standards, improvements and preventative activities.
A training session on road accident rescue was held at the Mine site for our volunteer firefighters. The training was provided by the Emergency Response Team (ERT) Superintendent and his emergency response officers. It was an initial training course that focused on strengthening technical skills in road accident rescue and getting the volunteers familiar with the equipment necessary for this type of rescue mission. The sessions focused on accident factors and overall procedures for such operations on a mine site. Firefighters have an obligation to participate in 120 hours of skills maintenance training per year. At the end of the training, the firefighters are immediately operational and have the technical capacity to deal with road accidents at Ambatovy’s Mine Site.
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Employee EngagementAmbatovy understands that the solidarity of our employees is not only at the heart of our operations, but the key to our future
success. We have made great efforts to provide our employees with the support they need at work and at home. In 2016, our
Internal Communication team steered its activities toward strengthening the communication and dialogue process between our
management and employees and actively engaging our team members in their work environment. Effective and regular two-
way communication with employees is the foundation of our employee relations programs. We are committed to listening to and
understanding the needs and challenges of our employees, taking action to improve the workplace, and supporting employees
in reaching their potential.
Reinforcing the Employee CommunityContinuing to strengthen the employee community is an important aspect of Ambatovy’s employee engagement process.
Engaging our employees to help them understand their importance and role in the success of the company continues to remain
vital, especially during challenging times we may face. Recognizing that our employees act as “ambassadors” for Ambatovy
with their families, friends, neighbors and fellow community members, efforts were made in 2016 to strengthen internal
communications, to support the flow of information amongst the many teams and departments that make up Ambatovy, and to
keep staff informed of key developments. As noted in last year’s report, the Intranet was rolled out during the third quarter of
2015 to give employees access to company information, news and decisions. It has proven to be a valuable communication
platform for employees at each of our sites. Over the course of the year, 96 news headlines were published on the Intranet.
In 2016 a variety of small activities were organized, including a call for talented individuals to show their skills at employee
talent shows, and participation in the “We are Ambatovy” initiative. “We are Ambatovy” is a group that connects Ambatovy
employees from different backgrounds and helps them to become “ambassadors” with the community. The initiative provides a
casual and convivial networking opportunity, which strives to create an open environment where employees can freely express
themselves and strengthen their sense of belonging to the company. The employees participating in “We are Ambatovy” help
others understand what our company is and how it works, share information, celebrate successes together, and uphold the
values of team spirit and solidarity. They believe that a touch of fun and humor is essential to foster healthier communications
and relationships with the company. Their objective is to be an example in everything they do for the company and for the
community. 81 employees are involved in the group. Activities in 2016 included a hiking excursion, a visit to the resettlement
village of Vohitrambato, visits to national parks and meetings with influential radio hosts from Antananarivo.
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In 2016, a few new communications initiatives were developed to further engage our employees and promote understanding.
• 40 television screens were installed in various places around our sites, such as cafeterias and reception areas, in order to
disseminate news about the company, to remind people about important issues, and to give updates on Ambatovy to our
employees, especially those who do not have regular access to computers.
• 32 “Let’s Chat!” sessions were launched to help strengthen ties between Ambatovy’s President and leaders in the company.
The sessions are held on a quarterly basis and are an opportunity for the President to share important news and to get
feedback from leaders about what they are experiencing in the field. Leaders have an opportunity to interact directly with the
President, ask questions and express their concerns. They are invited to share the key points of the discussions with their
teams in a cascade manner.
• “Share and Learn” sessions conducted by members of the Sustainability team have proven to be very effective in Toamasina,
so they were extended to the Mine Site and our office in Antananarivo. The purpose of these sessions is to educate
employees about various issues, such as the mining world in general and Ambatovy’s situation in particular, especially during
this period of a sustained and record drop in nickel prices. In 2016, 68 “Share and Learn” sessions were organized for 1,254
employees at our different sites.
• 2016 also saw the continuation of the Family Site Visit program at the Plant Site. To help dispel rumors that are circulating,
to foster a climate of trust and to create “ambassadors” in the communities, Ambatovy invited employees to bring their family
members for special guided tours of the Plant Site so that families could have their own personal Ambatovy experience, see
where their loved ones worked, ask questions, and witness for themselves what Ambatovy is all about. In 2016, 23 visits took
place, with 792 family visitors.
Employee Volunteer InitiativesAmbatovy encourages employees to volunteer their time in community initiatives as a way to demonstrate that we are a
responsible company, to express our solidarity with surrounding communities, and to contribute to positive outcomes. We
recognize the importance of such volunteer initiatives for both employees and communities alike, so we have developed a
policy which allows employees to take time during working hours in order to do volunteer work, up to one day per year. Through
these initiatives, employees dedicate their time and efforts, and use their skills, energy and expertise for the short and long-term
benefit of communities.
In 2016, 50 volunteers were recruited and trained to become part of our pool of peer educators in Moramanga in the fight
against HIV/AIDS. In the Brickaville area, 25 employees were involved in two volunteer initiatives: a municipal reforestation
event in Ranomafana and a vaccination campaign against polio in Ampasimadinika. In Toamasina, 75 employees participated in
the school nutrition program at the canteen of the Vohitrambato Primary School. This program aims to maintain the attendance
rate of students and improve their academic performance by providing well-balanced, healthy meals to the children. The
employees lent a hand to school instructors and community agents to help run the canteen, by fetching water, washing dishes
and helping prepare the children’s meals.
In addition, 10 volunteer firefighters have been selected among Ambatovy’s employees in Toamasina to join the ranks of
Ambatovy’s first responders. The Emergency Response Team (ERT) is now composed of 25 professional firefighters and 15
volunteers including the 10 new recruits. The objective for 2017 is to have a team of 50 rescuers in total, hence the recruitment
of another group of 10 volunteer firefighters. The service had to resort to volunteer firefighters instead of professional ones
because the number of professionals who form the core structure is determined by the company’s size and activity as well
as the existing risks. The volunteer firefighters are part of the back-up service in case of necessity. In the event of a major
intervention, the firefighters can be mobilized with a phone call. Their respective supervisors have already been informed of
this arrangement. The opportunity to volunteer gives each employee the possibility to demonstrate a sense of belonging to
Ambatovy and to be part of an operational structure that is capable of addressing a major situation that might occur within our
facilities.
77
Product Responsibility
PRODUCT RESPONSIBILITY GOALS 2016 RESULTS
Maintain ISO 9001-2008 certificationAmbatovy passed our second surveillance audit in 2016 to confirm our
continued compliance with ISO 9001-2008 requirements.
OverviewThe Ambatovy Quality Policy is our formal commitment to supplying defect-free products to all our customers. In order to deliver
on this commitment, we must:
• Understand the requirements as agreed with our customers;
• Communicate effectively with our customers and suppliers;
• Do our work correctly the first time;
• Supply products at standards that meet our customers’ needs;
• Practice effective communications about safety and quality;
• Involve all personnel;
• Continuously improve everything we do; and
• Comply with applicable government laws and regulations.
A practical way to implement these strategies is to have a formal Quality Management
System (QMS) in place. In 2014, Ambatovy achieved a great milestone when we
received ISO 9001-2008 certification for the refining, analysis and shipping of our
products. The Internal Organization for Standardization (ISO) is an independent, non-
governmental organization and developer of voluntary international standards. It facilitates world trade by providing common
standards across nations. Use of these standards ensures that products and services are safe, reliable, and of good quality. ISO
9001 certification is based on quality management principles, including strong customer focus, motivation and commitment of
senior management, the use of a process and risk-based approach to managing the business, and continuous improvement.
This certification has been very important for Ambatovy in that it allows us to list our nickel product on the London Metal
Exchange (LME).
The certification is valid for three years, with yearly audits conducted by an external party to ensure conformity and
improvement. In 2015 and 2016, Ambatovy had two surveillance audits to confirm our continued compliance with ISO 9001
requirements. We expect to undergo another audit in 2017 to renew our certification, this time under the new and more stringent
2015 version of the ISO 9001 standard.
Documentation ofQuality Management System (QMS)
The documentation required by the quality management system has the following structure:
Forms
Records
Operational DocumentsDescribe how we do
(procedure, job descriptions, ...)
ProcessData Sheets
Describe what we do
Quality Manual
78
Product Responsibility
Material Stewardship Ambatovy’s nickel and cobalt are stable unreactive metals, widely used in the production of stainless steel, other metal alloys,
speciality chemicals, and in a variety of other applications. However, Ambatovy’s production process involves industrial and
hazardous materials, such as chemicals and compressed gas. Ambatovy has implemented detailed policies and procedures
on handling, transporting, storing, recycling, and disposing of such items. We also maintain Safety Data Sheets (SDSs) from
suppliers on all hazardous materials and commodities that we use, and produce SDSs for Ambatovy products and by-products.
These data sheets are electronically accessible to employees. Training is provided on proper handling procedures and,
where relevant, on appropriate personal protective equipment requirements for safe handling and use. Our procurement and
transportation handling procedures are based on regulations from the International Marine Organization, the International Air
Transport Association and the European Agreement Concerning International Carriage of Dangerous Goods by Road.
When possible, we try to procure goods and services that have a positive social or environmental return. ALBI continues to work
with local businesses to procure a range of items for our operations, such as pallets made from Forest Stewardship Council-
certified sources. Other examples of procurement initiatives can be found in the Economic Performance section.
Customer Relations, Health and SafetyAmbatovy nickel products are marketed and sold through our partner companies and onward to the end customer. Ambatovy
cobalt products are marketed directly by Ambatovy, with exclusive distribution arrangements in Europe, India, and the USA. In
certain geographical areas including Asia and Africa, cobalt is marketed and sold by Ambatovy directly to the end customer.
Ammonium sulphate, used mainly as a fertilizer in the agricultural sector, is also marketed and sold through an exclusive
distribution arrangement into the global markets. Ambatovy and our partner companies are committed to ensuring that
customers have relevant and reliable science-based information on hand regarding the health and environmental effects of
Ambatovy products.
Ambatovy assesses the health and safety aspects of our products via membership in and participation in international industrial
organizations established to provide science-based knowledge on the human health and environmental effects of the products
and on product qualities. These organizations include the Nickel Institute (NI), the Cobalt Development Institute (CDI) as well
as consortia established for the purposes of complying with the requirements of the European Union’s Registration, Evaluation,
Authorization and Restriction of Chemical Substances (REACH) and Classification, Labeling, and Packaging (CLP) regulations.
All Ambatovy products have comprehensive Safety Data Sheets (SDSs), which provide the hazard classification as well as
guidelines and recommendations for safe handling and use procedures. These SDSs provide information that adheres to
regulatory standards according to the geographic area of sales.
Customers in the European Union have cooperated in the development of specific Generic Exposure Scenarios to assist with
compliance with the REACH regulations. These scenarios provide guidance on the operating conditions that must be met in
order to ensure the safe use of both nickel and cobalt with respect to potential impacts on workers handling Ambatovy products
as well as guidance on the avoidance of any negative impacts on local populations in the vicinity of facilities producing or using
these substances.
Ambatovy products comply with relevant rules and regulations, such as the REACH and CLP regulations in countries of product
destination. Careful attention is given to handling hazardous substances, and warning labels identify important instructions
as guidance. Carriers of these substances use these labels as indication of the nature of the products they ship and ensure
compliance with international standards such as the International Marine Dangerous Goods Code.
Both nickel and cobalt are sold directly to industrial end-use consumers; however, domestic customers who use the final
consumer products rarely come in direct contact with these refined substances. Industrial end-users are generally aware of the
health and safety aspects that must be considered.
79
Product Responsibility
The international industrial organizations to which Ambatovy belongs promote appropriate and safe uses of nickel and
cobalt, and advocate for appropriate science-based regulations. Environmental impacts of our products are considered and
communicated in a variety of ways, including via SDSs, product labeling and guidance on safe use, environmental quality
standards, and, under REACH, through a variety of exposure scenarios for industrial uses.
PRODUCT INFORMATION REQUIRED
Information required for product labeling Yes
Content, particularly with regard to
substances that might produce an
environmental or social impact
Yes
Safe use of the product of service Available on SDSs, NI and CDI websites
Disposal of the product and
environmental/social impacts
A caution to dispose of materials and containers in accordance with the
applicable national, regional and/or local environmental regulations is
included on the SDSs; due to the high value of nickel and cobalt, global
recycling rates are significant
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Message from our Vice President of Sustainable Development
Dear Reader,
For Ambatovy, a key element of sustainability is the participation and inclusion of our
stakeholders. It is to this end that 2016 was, for us, a year of evaluating and assessing
the sustainability of the investments we have made in environmental protection and
rehabilitation, social development, and the economic development of those who are
directly impacted by our activities.
Since we were also facing a disparaging metal outlook, cost-cutting initiatives continued
throughout the year in order to ensure Ambatovy’s own viability in the coming years as
we wait for the price of nickel to regain its lost ground. However, despite our financial
constraints, we were able to maintain progress in our host communities by focusing on
supporting local farmers with agricultural inputs and training, creating business ties with
local enterprises, and cultivating the local entrepreneurial climate.
For example, through the Ambatovy Local Business Initiative (ALBI), we identified additional community organizations that are
able to turn our waste woods into practical materials, providing valuable training opportunities to disadvantaged youth who may
be able to find employment as woodworkers or open their own businesses. We also continued to support the capacity building
and creation of local businesses able to supply us with industrial inputs, which not only helps us in cutting our cost-of-goods, but
also provides further opportunities for local employment as well as a resource for other industrial companies in the future. In
response to our recycling needs, a local company is now able to turn our used tires into products, another handles our plastic
waste, and two more are able to process food and industrial oil.
Through the Ambatovy Social Investment Fund, several projects were completed and handed over to the appropriate
authorities during the year. We are very proud of these major accomplishments and are confident that they will contribute to
the improvement and well-being of communities where we operate. In 2016, we also began to turn our attention to projects
that are more community-based in nature. Through extensive consultations and meetings with local authorities, community
members and civil society groups, several small-scale projects were identified and implemented in the Moramanga, Brickaville
and Toamasina areas with support from Ambatovy. Our hope is that in focusing on the base community level, and by including
community members in the actions being taken, the outcome of these projects will be sustainable and will continue to benefit
community members long after our presence is gone.
Louis Roland-Gosselin
Vice President, Sustainable Development
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About This Report
Report ProfileThis report is guided by the Global Reporting Initiative (GRI) G4 – Core option and gives performance data for January through
December 2016, following our 6th annual Sustainability Report covering 2015, published in Q4 2016. Ambatovy is a large-scale
mining investment project that achieved financial completion in September 2015 and is at the end of our ramp-up stage. This
report discloses our activities and investments made during this period that may be specific to our company’s current situation
and may not be applicable in future reports.
No significant changes regarding size, or structure took place during the reporting period, nor did we significantly diverge from
our last report in terms of scope, boundary, or measurements that would affect the comparability of previous reports or require
a restatement of major disclosures. Regarding ownership, in September 2015, after financial completion was attained, partner
SNC-Lavalin chose to divest its shares to Sumitomo Corporation as per a previously arranged agreement concluded during
Ambatovy’s construction period. Aside from this, no significant changes in ownership occurred.
We welcome comments and questions related to this report. Please contact Ambatovy’s Sustainability Division at
[email protected] for further information.
Defining Report ContentThere were three key considerations that stood out for us during the process to determine what is included in the report and how
we prioritize content and its organization.
• Organizational commitments: In view of Ambatovy’s obligations to our national regulator and our commitment to the IFC
Performance Standards and other international codes, we have internal programs in place to ensure coherence with these
standards.
• Completeness and availability of data: As Ambatovy is still young, some data indicators that were necessary during the
construction and transition phases are no longer necessary as we move into full operations. As such, there were some
indicators that were selected or omitted due to availability of quality data and applicability to our operational stage.
• Materiality of data for internal and external stakeholders: In selecting from the various indicators for our report, Ambatovy
selected only those that could be considered relevant and impactful to our stakeholders at all levels. We also provided
additional information not required in the GRI guidelines that we felt was relevant to our operations and important in light of
our mandatory and voluntary commitments to national and international regulatory bodies, associations, and programs.
We intend this report to be used as a reference for a variety of stakeholders, particularly employees, government authorities,
partner companies, financial institutions, international organizations, civil society groups, suppliers, and other members of the
business and media community. More in-depth information on our stakeholder identification and activities can be found in the
Stakeholder Engagement section of this report.
82
About This Report
Report BoundaryThis report covers Ambatovy and the departments and initiatives directly under our control. As a joint venture private entity,
there are no other groups, subsidiaries, leased facilities, joint ventures, suppliers, or other bodies that fall under Ambatovy’s
jurisdiction. The report has drawn the majority of data from internal sources, but, when relevant or feasible, we have included
company-wide data that includes indicator information from sub-contractors, and other external sources.
Data Measurement TechniquesEach department uses its own data collection and measurement techniques oriented towards our particular objectives and
requirements. Where appropriate, we have noted our calculation method and/or factors. However, it is not practical to describe
in detail all the methods and techniques used. Therefore, Ambatovy would be pleased to respond to specific requests for more
information relating to data measurement techniques and calculation methods.
GRI Content IndexThe GRI has two reporting options, in which organizations select the amount of the reporting framework they will apply to their
reports based on its relevance to their activities and their ability to provide quality data – Core and Comprehensive. This year,
we have taken steps to produce a report that is on the path to be in accordance with GRI’s G4 Core reporting requirements.
This gives stakeholders essential information on our structure, strategy and performance with specific information that relates to
the particular sustainability challenges of our industry. Since our last report, we have increased our level of disclosure as per the
new standards set by the GRI 4 guidelines and we are proud to offer improved information to our stakeholders.
For a complete list of where to find each GRI indicator, please see Appendix 4 for the GRI indicator reference table. For further
information on the definitions, protocols and the GRI framework, please visit www.globalreporting.org where the complete GRI
G4 Framework is available.
83
Appendix 1: Our Contributions to the Sustainable Development Goals (SDGs)
The partnership that was established between the United Nations System and Ambatovy in November 2016 will help us
align our work with the achievement of the Sustainable Development Goals (SDGs) in Madagascar, and will help ensure that
Ambatovy’s nickel and cobalt operations bring significant, lasting and positive impacts to the local populations. Below is a
summary of ways in which Ambatovy is contributing to the achievement of the 17 SDGs. More detailed information about our
work can be found in the text of the report.
End poverty in all its forms everywhere ■ One of the biggest private sector employers in Madagascar
■ Staff of 3,000 direct employees and 5,000 contractors: 90% of our employees are Malagasy nationals
■ Hiring practices that emphasize hiring national employees, local to our sites of operations
■ Support for skills development, both for our employees and local communities
■ Policy of Buy locally, hire locally
End hunger, achieve food security and improved nutrition, and promote sustainable agriculture
■ Training in improved agricultural and small animal husbandry techniques as well as new income-generating
activities (IGAs) for former construction employees, for resettled families and for farmers whose rice fields were
impacted
■ School nutrition program at the resettlement village of Vohitrambato
Ensure healthy lives and promote well-being for all, at all ages ■ Support for youth kiosks along the RN2 to promote HIV/AIDS awareness and reproductive health
■ Support for HIV/AIDS awareness-raising and testing with Ambatovy employees and communities
■ Development of communities’ medical facilities through donations of equipment, and rehabilitation and
construction of infrastructure
Ensure inclusive and equitable education and promote lifelong learning opportunities for all
■ Construction of schools within our resettlement communities
■ Scholarship support for Vohitrambato students wishing to further their education
■ Collaboration with UNICEF on the construction of eco-friendly schools
■ Training and capacity building for school administrators in our zones
■ Training and leadership development for our employees
Achieve gender equality and empower all women and girls ■ Equal opportunity employer, even for traditionally male mining roles
■ Development and promotion of income-generating activities with predominantly female-headed households
■ Promotion of Zero-Tolerance Policy for the prevention of sexual exploitation of young girls
Ensure viability and sustainable management of water and sanitation for all ■ Comprehensive Water Management Plan in place and extensive water quality monitoring system at all
Ambatovy sites
■ Support of Water User Associations in our communities
■ Construction of water quality pumps and water points in villages, on school grounds, and at youth kiosks
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Appendix 1: Our Contributions to the Sustainable Development Goals (SDGs)
Ensure access to affordable, reliable, sustainable, and modern energy for all ■ Creation of electric vehicle fleet at Plant Site
■ Provision and installation of solar panels at Vohitrambato resettlement village
Promote sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all
■ Employment program with comprehensive employment benefits
■ Work Council to strengthen employee relations and employee-management interactions
■ Requirements for our contractors including respect for health and safety standards and procedures
■ Active contracts with more than 860 local suppliers and support for local business creation
■ Produce for Ambatovy’s canteens sourced from approximately 3,000 local farmers through bulk purchasing
centers
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
■ Extensive rehabilitation and construction of roads
■ Rehabilitation and extension of railroad track in Toamasina
■ Expansion of Port B in Toamasina
■ Investment in social infrastructure through the Social Investment Fund
Reduce inequalities within and among countries ■ With nickel as Madagascar’s top export product, supporting the local currency and narrowing the trade deficit
■ Bringing in significant foreign exchange earnings through investment, expatriate salaries and product sales
■ Support for anti-corruption measures and firm stance against corruption in all forms
Make cities and human settlements inclusive, safe, resilient and sustainable ■ Installation of railroad safety fences and rail-road crossings
■ Work with regions on industrial risks and disaster preparedness
■ Support for waste management projects in Moramanga an Toamasina
Ensure sustainable consumption and production patterns ■ Mitigation of inflation in local markets by purchasing produce through centers working directly with local
farmers
■ Development of local businesses to support industrial sector and to recycle industrial waste products
Take urgent action to combat climate change and its impacts ■ Extensive reforestation work and conservation actions with local community involvement
■ Minimization of emissions by utilizing gravity-fed system to transport slurry along the pipeline from the Mine to
the Plant and by importing low emission coal for Plant processes
■ Coordinated bus transport for employees and installation of electric vehicles at Plant Site
85
Appendix 1: Our Contributions to the Sustainable Development Goals (SDGs)
Conserve and sustainably use the oceans, seas, and marine resources for sustainable development
■ Recycling of process water rather than relying entirely on river water withdrawals
■ Conservation activities for rivers in our areas and the native fish species, including control of invasive species
■ Waste treatment through the Tailings Management Facility to ensure that water discharged into the sea has a
composition similar to that of marine water
Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainablymanageforests,combatdesertification,haltandreverselanddegradation and halt biodiversity loss
■ Extensive biodiversity monitoring, mitigation and restoration program in place
■ BBOP pilot project since 2009, promoting avoidance, minimization, rehabilitation/restoration and offsets to
achieve no net loss, and preferably a net gain, in biodiversity
■ Work with village organizations on monitoring and enforcing the sustainable use of ecosystem services
■ Protection of conservation offset sites
■ Protection, monitoring, evaluation, and study of flora and fauna in our conservation areas
■ Environmental awareness-raising at schools and in communities surrounding our conservation zones
■ Awareness-raising on the damage caused by slash-and-burn agriculture, poaching, bush meat consumption,
and endangered species trade
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable, and inclusive institutions at all levels
■ Support for the EITI reconciliation process and participation in the Voluntary Principles on Security and Human
Rights
■ Collaboration with Government and local authorities to develop a mechanism for the safe, transparent,
equitable and sustainable management of mining royalties
■ Firm stance on business ethics and anti-corruption, which all employees and contractors must adhere to
■ Work with the international NGO Search for Common Ground to foster constructive company-community
dialogue, to promote mutual understanding and to build trust
Strengthen the means of implementation and revitalize the global partnership for sustainable development
■ Extensive partnerships supporting our activities in health, education, social development, and the environment
■ Partnerships and close collaborations with the public, private, NGO, and business communities in Madagascar
and around the world
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Appendix 2: Partnerships and Associations
Ambatovy is a member of several industry associations and initiatives. We are a member of the Multi-Stakeholder Group
for the EITI in Madagascar, the Chamber of Mines of Madagascar, the Madagascar Industrial Union (Syndicat Industriel de
Madagascar, SIM) and the Madagascar Business Association (Groupement des Enterprises de Madagascar, GEM). We also
engage with international industry bodies, such as the Nickel Institute (NI) and the Cobalt Development Institute (CDI) through
our operator, Sherritt International Corporation.
Ambatovy is also a member of several regional coordination committees with civil society and local government. Ambatovy
works with a number of local, national and international organizations to ensure transparency, to create opportunities and to
develop sustainable operations. These partners include:
International• Adventist Development and Relief Agency (ADRA)
• Conservation International (CI)
• Missouri Botanical Garden (MBG)
• Population Services International (PSI)
• United Nations Children’s Fund (UNICEF)
•Wildlife Conservation Society (WCS)
• Office for the Coordination of Humanitarian Affairs (OCHA)
• United Nations Development Programme (UNDP)
• International Committee of the Red Cross (ICRC)
• Search for Common Ground (SFCG)
• Duke Lemur Center of Duke University
• French Military Cooperation
• Extractive Industries Transparency Initiative (EITI)
• Prodaire (Projet de Développement de l’Approche Intégrée pour promouvoir la Restauration Environnementale), a program
funded by the Japanese International Cooperation Agency (JICA)
• South African Institue for Aquatic Biodiversity
National• Action et Développement
• Asity Madagascar
• Association Nationale d’Actions Environnementales (ANAE)
• Association Handicaps Esperance Tamatave
• Brickaville Miara-Mitraka (BRIMIMI)
• Bureau National de Gestion des Risques et Catastrophes (BNGRC)
• Centre d’Études et de Recherches Ethnologiques et Linguistiques (CEREL)
• Centre National de Recherches Océanographique (CNRO)
• Centre National de Recherche sur l’ Environnement (CNRE)
• Centre Technique Horticole de Tamatave (CTHT)
• Circonscription de l’Environnement et des Forêts (CIREF)
• Cultural and Social Centre (CCS)
• Department of Animal Biology at the University of Antananarivo
• Direction Régionale de l’Environnement, de l’Ecologie et des Forêts (DREEF)
• Direction Régionale du Développement Rural (DRDR)
• Ezaka ho Fampandrosoana any Ambanivohitra (EFA)
• Ezeka Vaovao
• Fifanampiana Kristiana ho an’ny Fampandrosoana eto Madagasikara (FIKRIFAMA)
87
Appendix 2: Partnerships and Associations• Fianakaviana Sambatra (FISA)
• Fikambanambe Mivondrona Ampitambe Mahatsara (FIMIAM)
• Groupe d’Etude et de Recherche sur les Primates (GERP)
• Henry Doorly Zoo (HDH)
• Homéopharma
• Groupe MAVITRIKA – Tamatave University
• Man and the Environment (MATE)
• Maison des Jeunes Moramanga
• Mitia Association
• Mitsinjo Association
• Museum of Art and Archeology of the University of Antananarivo (ICMAA)
• Ny Sahy
• Ombona Tahiry Ifampisamborana Vola (OTIV)
• Organe de Développement du Diocèse de Toamasina (ODDIT)
• Regional Indutrial Risk Management Committee (CRGRI)
• SAF/FJKM
• Saint Gabriel
• Tourism Office of the Alaotra Mangoro Region (ORTALMA)
• University of Antananarivo
• Vahatra
• Voahary Voakajy
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Appendix 3: Priority Species
These priority species are listed by the International Union for Conservation of Nature (IUCN) as endangered, critically
endangered or evolutionary significant units (ESU), and are nationally, regionally or locally endemic to our conservation and
intervention areas.
LEMURSNAME STATUS LOCATIONS
Daubentonia madagascariensis Endangered Mine footprint, Mine conservation zone, Pipeline, Ankerana, CFAM, Torotorofotsy
Indri indri Critically EndangeredMine footprint, Mine conservation zone, Pipeline, Ankerana, CFAM, Torotorofotsy
Prolemur simus Critically EndangeredMine conservation zone, Pipeline, CFAM, Torotorofotsy
Propithecus diadema Critically EndangeredMine footprint, Mine conservation zone, Pipeline, Ankerana, CFAM, Torotorofotsy
Varecia variegata Critically EndangeredMine conservation zone, Pipeline, Ankerana, CFAM
OTHER MAMMALSNAME STATUS LOCATIONS
Microgale jobihelyEndangered
Mine footprint, Mine conservation zone, CFAM
BIRDSNAME STATUS LOCATIONS
Anas melleri Endangered Mine footprint, TorotorofotsyArdea humbloti Endangered Mine footprint, TorotorofotsyArdeola idea Endangered TorotorofotsySarothrura watersi Endangered Torotorofotsy
AMPHIBIANSNAME STATUS LOCATIONS
Mantella aurantiaca Critically EndangeredMine footprint, Mine conservation zone, Pipeline, CFAM, Torotorofotsy
Mantella crocea EndangeredMine footprint, Mine conservation zone, CFAM
Platypelis mavomavo Endangered Mine footprint, Mine conservation zone
REPTILESNAME STATUS LOCATIONS
Brookesia ramantsoai EndangeredMine footprint, Mine conservation zone, CFAM
Calumma furcifer Endangered Pipeline, AnkeranaCalumma gallus Endangered Pipeline, AnkeranaPhelsuma flavigularis Endangered PipelinePhelsuma pronki Critically Endangered Mine footprint, Mine conservation zoneUroplatus pietschmanni Endangered Mine footprint, Mine conservation zone
FISHNAME STATUS LOCATIONS
Ratsirakia ESU Mongoro ESU Mine footprint, Mine conservation zoneRatsirakia ESU Sakalava ESU Mine footprint, Mine conservation zoneRatsirakia ESU Vondronina ESU Mine footprint, Mine conservation zoneRheocles ESU Mangoro ESU Mine footprint, Mine conservation zoneRheocles ESU Vondronina/Rianila ESU Mine footprint, Mine conservation zone
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Appendix 4: GRI Content Index
This report contains standard disclosures from the GRI Sustainability Reporting Guidelines. The index below includes indicators
from the GRI G3.1 Guidelines. We are in the process of transitioning to the new GRI Standards and our 2017 Sustainability
Report will reflect these changes.
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
STANDARDDISCLOSURESPARTI:ProfileDisclosures
1. STRATEGY AND ANALYSIS
1.1Statement from the most senior decision-maker of the organization.
Fully Message from our President
1.2 Description of key impacts, risks, and opportunities. FullyKey Impacts, Risks and Opportunities
2. ORGANIZATIONAL PROFILE
2.1 Name of the organization. FullyAbout Us; Corporate Governance
2.2 Primary brands, products, and/or services. Fully About Us
2.3Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.
FullyAbout Us; Corporate Governance
2.4 Location of organization’s headquarters. Fully About Us
2.5
Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.
Fully About Us
2.6 Nature of ownership and legal form. Fully Corporate Governance
2.7Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).
FullyAbout Us; Product Responsibility
2.8 Scale of the reporting organization. Partially About Us
2.9Significant changes during the reporting period regarding size, structure, or ownership.
Fully About this Report
3. REPORT PARAMETERS
3.1Reporting period (e.g., fiscal/calendar year) for information provided.
Fully Our Report; About this Report
3.2 Date of most recent previous report (if any). Fully Our Report; About this Report
3.3 Reporting cycle (annual, biennial, etc.). Fully Our Report; About this Report
3.4 Contact point for questions regarding the report or its contents. Fully Our Report; About this Report
3.5 Process for defining report content. Fully Our Report; About this Report
3.6Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers).
Fully Our Report; About this Report
3.7State any specific limitations on the scope or boundary of the report.
Fully Our Report; About this Report
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Appendix 4: GRI Content Index
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
3.8
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.
Fully Our Report
3.9
Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the report. Explanation of any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols.
PartiallyAbout this Report;In text as appropriate
3.12Table identifying the location of the Standard Disclosures in the report.
Fully Appendix 4
4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENT
4.1Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.
FullyCoporate Governance; Key Impacts,Risks and Opportunities
4.4Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.
Partially
Governance and Human Rights;Comnunities and Social Relations
4.8Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.
FullyMission, Vision, Values;Our Sustainability Commitment
4.12Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.
FullyGovernance and Human Rights
4.13
Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization: has positions in governance bodies; participates in projects. or committees; provides substantive funding beyond routine membership dues; or views membership as strategic.
FullyStakeholder Engagement; Appendix 2
4.14 List of stakeholder groups engaged by the organization. FullyStakeholder Engagement; Our Stakeholders
4.15Basis for identification and selection of stakeholders with whom to engage.
FullyStakeholder Engagement; Our Stakeholders
4.16Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.
PartiallyStakeholder Engagement; Our Stakeholders
4.17
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.
PartiallyGovernance and Human Rights;Stakeholder Engagement
91
Appendix 4: GRI Content Index
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
STANDARD DISCLOSURES PART II: Performance Indicators
ECONOMIC
DMA EC Disclosure on Management Approach EC. Fully Economic Performance
ECONOMIC PERFORMANCE
EC1
Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.
FullyEconomic Performance; Communities and Social Relations; Labor
EC4 Significant financial assistance received from government. Fully Economic Performance
MARKET PRESENCE
EC5Range of ratios of standard entry level wage compared to local minimum wage at significant location of operation.
Fully Labor
EC6Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.
FullyEconomic Performance;Product Responsibility
EC7Procedures for local hiring and proportion of senior management and workforce hired from the local community at significant locations of operation.
FullyEconomic Performance;Labor
INDIRECT ECONOMIC IMPACTS
EC8Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.
Fully Economic Performance; Communities and Social Relations
EC9Understanding and describing significant indirect economic impacts, including the extent of impacts.
Fully Economic Performance
ENVIRONMENT
DMA EN Disclosure on Management Approach EN. Fully Environment
EN1 Materials used by weight or volume. Fully Environment
92
Appendix 4: GRI Content Index
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
ENERGY
EN3 Direct energy consumption by primary energy source. Fully Environment
EN8 Total water withdrawal by source. Fully Environment
EN9 Water sources significantly affected by withdrawal of water. Fully Environment
BIODIVERSITY
EN11Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.
Fully About Us;Environment
EN12Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.
Fully Environment
MM1Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated.
Fully Environment
EN13 Habitats protected or restored. Fully Environment
EN14Strategies, current actions, and future plans for managing impacts on biodiversity.
Fully Environment
MM2The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place.
Fully Environment
EMISSIONS, EFFLUENTS AND WASTE
EN16 Total direct and indirect greenhouse gas emissions by weight. Partially Environment
EN22 Total weight of waste by type and disposal method. Partially Environment
MM3Total amounts of overburden, rock, tailings, and sludges and their associated risks.
Fully Environment
EN23 Total number and volume of significant spills. Partially Environment
EN24
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.
Partially Environment
EN25Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff.
Partially Environment
93
Appendix 4: GRI Content Index
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
COMPLIANCE
EN28Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.
Fully Economic Performance
TRANSPORT
EN29Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce.
Fully Environment
OVERALL
EN30Total environmental protection expenditures and investments by type.
Partially Economic Performance
LABOUR PRACTICES AND DECENT WORK
DMA LA Disclosure on Management Approach LA. Fully Labor
EMPLOYMENT
LA1Total workforce by employment type, employment contract, and region.
Partially Labor
LA3Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.
Partially Labor
LABOUR/MANAGEMENT RELATIONS
LA4Percentage of employees covered by collective bargaining agreements.
Fully Labor
MM4Number of strikes and lock-outs exceeding one week’s duration, by country.
Fully Labor
OCCUPATIONAL HEALTH AND SAFETY
LA6
Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.
Fully Labor
LA7Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.
Partially Labor
LA8Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.
FullyCommunities and Social Relations;Labor
94
Appendix 4: GRI Content Index
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
TRAINING AND EDUCATION
LA10Average hours of training per year per employee by employee category.
Partially Labor
LA11Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.
Fully Labor
HUMAN RIGHTS
DMA HR Disclosure on Management Approach HR. FullyGovernance and Human Rights
INVESTMENT AND PROCUREMENT PRACTICES
HR1Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.
Fully Economic Performance
HR2Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.
PartiallyGovernance and Human Rights;Economic Performance
SOCIETY
DMA SO Disclosure on Management Approach SO. FullyCommunities and Social Relations
COMMUNITY
SO1Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.
PartiallyCommunities and Social Relations
MM7The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary rights of local communities and Indigenous Peoples, and the outcomes.
FullyGovernance and Human Rights
RESETTLEMENT
MM9Sites where resettlements took place, the number of households resettled in each, and how their livelihoods were affected in the process.
FullyCommunities and Social Relations
CORRUPTION
SO3Percentage of employees trained in organization’s anti-corruption policies and procedures.
Partially Governanc and Human Rights
PUBLIC POLICY
SO6Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.
Fully Economic Performance
95
Appendix 4: GRI Content Index
INDICATOR DESCRIPTION REPORTED CROSS-REFERENCE
PRODUCT RESPONSIBILITY
DMA PR Disclosure on Management Approach PR. Fully Product Responsibility
MATERIALS STEWARDSHIP
MM11 Programs and progress relating to materials stewardship. FullyEconomic Performance;Product Responsibility
PRODUCT AND SERVICE LABELLING
PR3Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.
Fully Product Responsibility
COMPLIANCE
PR9Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.
Fully Economic Performance
96
Ambatovy
Tranofitaratra Building, 6th floor
Ravoninahitriniarivo Street
Ankorondrano
Antananarivo 101
Madagascar
T: + 261 20 22 397 35
www.ambatovy.com