dodd-frank wall street reform and consumer protection act: “conflict” minerals and mine safety...
TRANSCRIPT
BEHRE DOLBEARfounded 1911MINERALS INDUSTRY ADVISORS
Dodd-Frank Wall Street Reform and Consumer Protection Act: “Conflict” Minerals and Mine Safety Reporting,
…plus other reasons…
MINE SAFETY & HEALTHWhy does it matter?
2BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Dodd-Frank Wall Street Reform and Consumer Protection Act; January 2010:“Conflict” Minerals and Mine Safety Reporting
MSHA actions and mining fatalities – related…? International investors
“Equator Principles”Socio-economic factors:
Mining companies need to win the trust of local communitiesThey can no longer operate unsafely or put the community at
risk of illnessWhy should I run a safe mine…?
Mine Safety Matters...
3BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Intent of the 848-page Act:
To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘‘too big to fail’’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.
Dodd-Frank Wall Street Reform and Consumer Protection Act
4BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Section 1502. Conflict Minerals:
Intended to limit minerals being used to promote conflict in the Democratic Republic of the Congo and adjoining countries.
Dodd-Frank Wall Street Reform and Consumer Protection Act
5BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Section 1503. Reporting Requirements Regarding Coal or Other Mine Safety :
Intended to take into account the safety record of mines as a factor in their reporting status.
Dodd-Frank Wall Street Reform and Consumer Protection Act
6BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Why are these two provisions important?Due diligence studies are intended to evaluate if
mines can continue to operate, or if undeveloped mineral deposits can be brought into production.
Fatal flaws might include either of the previous two Dodd-Frank provisions.“Conflict minerals” may be relatively easy to
spot and/or avoid.Safety concerns are less obvious.
Dodd-Frank Wall Street Reform and Consumer Protection Act
7BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
1. For each coal or other mine of which the issuer or a subsidiary of the issuer is an operator—(A) no. of significantly and substantially violations under 104(a) of the Mine Act 1977;(B) no. of orders under section 104(b); (C) no. of citations and orders for unwarrantable failure under section 104(d);(D) no. of flagrant violations under section 110(b)(2);(E) no. of imminent danger orders under section 107(a);(F) dollar value of proposed assessments; and(G) no. of mining-related fatalities.
Sec. 1503(a) Reporting Requirements Regarding Coal or Other Mine Safety
8BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
2. A list of such coal or other mines, of which the issuer or a subsidiary of the issuer is an operator, that receive written notice from the Mine Safety and Health Administration of—(A) a pattern of violations under section 104(e); or(B) the potential to have such a pattern.
3. Any pending legal action before the Federal Mine Safety and Health Review Commission involving such coal or other mine.
Sec. 1503(a) Reporting Requirements Regarding Coal or Other Mine Safety
9BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
…each issuer that is an operator, or that has a subsidiary that is an operator, of a coal or other mine shall file a current report with the Commission on Form 8–K (or any successor form) disclosing the following regarding each … mine of which the issuer or subsidiary is an operator:
1. The receipt of an imminent danger order issued under section 107(a).
2. The receipt of written notice from the Mine Safety and Health Administration that the coal or other mine has—(A) a pattern of violations of under section 104(e); or(B) the potential to have such a pattern.
Sec. 1503(b) Reporting Shutdowns and Patterns of Violations
10BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
New standards under 17 CFR PARTS 229, 239 and 249–Codifying regulations under the Dodd-
Frank Act.– Effective Date: January 27, 2012.–94 pages…
17 CFR PARTS 229, 239 and 249
11BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
In the aftermath of several coal mine disasters, a wave of legislative and regulatory zeal impacted the United States mining industry, including the Mine Improvement and New Emergency Response Act of
2006 (MINER Act), heightened penalties in 2007 and 2008 for safety and health
violations of 30CFR, and attempts at passing the Supplemental Mine Improvement and
New Emergency Response Act of 2007 (S-MINER Act).These resulted in increased enforcement actions…
Why Dodd-Frank for Mine Safety?
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
MSHA AssessmentsAs
sess
men
ts ($
mill
ions
)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
MSHA AssessmentsAs
sess
men
ts ($
mill
ions
)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$25.1
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
MSHA AssessmentsAs
sess
men
ts ($
mill
ions
)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$25.1
$129.4
BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
MSHA AssessmentsAs
sess
men
ts ($
mill
ions
)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$25.1
$129.4
$154.3
16BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
BUT… What about Mining Fatalities?Av
erag
e An
nual
Fat
aliti
es
1936
2012-- through --
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800 1,546
35
Mine Safety &Health Act - 1977
17BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Mechanized, high-volume mining methods remove workers from danger
…plus…Miners are taking responsibility for their own
behavior; all large companies have behavior-based safety systems, and…
National and international pressure around the world said, “Enough…!”
Why the Drop…?
18BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Why the Drop…?
WOULDYOURATHERDOTHIS…?
19BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Why the Drop…?
OR THIS…?
20BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Objectives– to prevent accidents, harmful effects on
the health of those employed and diseases arising from employment in opencast mines;
– to ensure the appropriate design, proper technologies and safe operation of opencast mines;
– to provide the means of analyzing existing technologies from the standpoints of safety and health and conditions of work, and modifying these technologies to remove the hazards discovered by the analyses;
ILO – Safety & health in mines
21BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Objectives (continued)– to provide guidance in setting up
administrative, legal and educational frameworks within which preventive and remedial measures can be implemented;
– to promote the fullest consultation and cooperation between governments, employers' organisations and workers' organisations in the improvement of health and safety in opencast mining.
ILO – Safety & Health in Mines
22BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Coal mine explosion in Mexico, with 60+ fatalities, led to the mine’s closure
Highwall failure in Malaysia, with 2 fatalities, resulted in major changes to mining operations
Underground mine fatality in China led to substantial revisions to contractor policies
Ventilation concerns in an underground mine in Indonesia led to major capital expenditures
These are just some cases I have worked on……the list goes on…
Why is mine safety important, if I don’t operate in the US ?
23BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
International banks got fed up with irresponsible mining operators and established a set of principles under which a mine would be judged for potential investment
These deal with “soft” issues, such as community involvement, sustainability, environmental stewardship, etc.
Safety plays a part…
The Equator Principles
24BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Higher Worker Morale
Increased Productivity
Lower Financial Risk
Why an Effective Safety Program Works
25BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
Higher Worker Morale
Increased Productivity
Lower Financial Risk
More Predictable Operational Results
Why an Effective Safety Program Works
28BEHRE DOLBEAR
founded 1911 MINERALS INDUSTRY ADVISORS
MINE SAFETY & HEALTH
by H John Head, PE, CEngBehre Dolbear – Americas+1 (630) [email protected]