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Many stakeholders share our view that we should serve a social purpose and make positive contributions to society for the long term. Our sustainable development programs facilitate our ability to deliver on this ambition. 

We must maintain acceptance to operate through shared value at the local level in order to reinvest in our existing properties and invest in new ventures, thereby increasing the production of metals needed for a healthy and prosperous world. Our sustainability performance is critical to meeting society’s responsible sourcing objectives so that we can place our products, which power societal advancement, into the global marketplace today and into the future. 

To supply essential metals to current and future generations, we are guided by our stated business objectives, principles and policies, and we work continuously to improve our systems. Throughout this report, we review the progress we are making on key issues, including those emerging, which affect our company and our stakeholders. 

 

PHOTO DESCRIPTION: Safford mine, Arizona.

 

Sustainable Development Leadership Team
Our company’s Sustainable Development Leadership Team considers both imminent matters and emerging trends while providing strategic guidance for our programs. The team is sponsored by our Senior Vice President and Chief Administrative Officer and is led by our Vice President - Environmental Services and Sustainable Development. Our Chief Operating Officer, business unit presidents, as well as vice president-level or senior staff from the safety, supply chain, security, human resources, sales, legal/compliance, and land and water functions comprise the team. The team solicits input from internal and external subject matter experts. 

During the year, the team reviewed and addressed key issues and projects including: 

  • Evolving responsible sourcing frameworks and product branding initiatives, including the Responsible Mining Initiative’s Risk Readiness Assessment, International Copper Association’s “Copper Mark” and Cobalt Institute’s Cobalt Industry Responsible Assessment Framework 
  • Development of ICMM’s newly adopted Performance Expectations and plans for asset-level implementation and assurance 
  • Updates to the Freeport-McMoRan Sustainable Development Risk Register process that include additional topics with enhanced definitions for assessment that cover common areas of interest for downstream stakeholders 
  • Proposed update to the Corporate Responsibility Committee charter to include opportunities to improve the overall business resiliency to climate-related impacts and trends in public disclosures associated with climate change 
  • Opportunities for solar project development on or near company properties and renewable power contracting opportunities with utilities 
  • Trends toward increased ESG* integration and consideration into investment decisions within mainstream financial sector organizations and related engagements with specific organizations including sustainability research firms 
  • Progress on strategic projects to secure long-term renewable water sources for operations 
  • Status of the company’s initiatives to recruit and advance career opportunities for women in our workforce 
  • Key observations related to independent assurance of our sustainability programs, including implementation of the ICMM Sustainable Development Framework
* Environmental, social and governance

 

Audits and Assessments

To facilitate implementation of our policy commitments and objectives, we utilize a combination of audit and assessment programs along with an annual program for site-level third-party assurance of our sustainability framework – including the implementation of our commitments under the ICMM Sustainable Development Framework. Our health and safety management systems and environmental management systems obtain independent certification to Occupational Health and Safety Assessment Series (OHSAS) 18001 and International Organization for Standardization (ISO) 14001, respectively. These systems include corrective and preventive action tracking for internal and external audit findings. Our Tailings Stewardship Program includes inspections and reviews all active and inactive tailings storage facilities (TSFs). Engineers of Record inspect our operating TSFs on a quarterly basis. Our site-level human rights impact assessments help us apply a human rights lens to our established management systems and test their effectiveness in identifying, mitigating and remediating human rights risks and impacts. In addition to our own audit programs, customers and financial institutions periodically request to conduct sustainability-focused audits or assessments at certain facilities. Our operations are routinely inspected by regulatory agencies of host governments. Findings and feedback from these processes can be improvement opportunities for our collective programs.

Project Development Sustainability Review

Our Project Development Sustainability Review process allows us to integrate sustainability considerations into mine development or expansion projects. The review is designed to help multi-disciplinary project teams identify risks, unintended consequences, trade-offs and opportunities so they may be addressed early and through each stage of project development. Project Development Sustainability Reviews may occur at the scoping, prefeasibility, feasibility and/or engineering/construction stages of projects and are also applicable to exploration projects.

This review complements our operational Sustainable Development Risk Register procedure for current operations. Since its inception in 2011, we have implemented reviews for 27 projects, including two during 2018. Key areas of focus identified at different project stages include access to water, energy and materials, potential impacts to hydrology, air quality, biodiversity, human rights, community receptivity, economic impacts, and land acquisition and resettlement.

To Our Stakeholders

DEAR FELLOW STAKEHOLDERS

Diversityn behalf of our Board of Directors and senior management team, we are pleased to present to you our 2018 Working Toward Sustainable Development Report “Proven Assets. Fundamental Value.” Within the report, we review our sustainability programs and performance that strengthen our ability to deliver social purpose. In doing so, our sharp focus is on maintaining broad stakeholder acceptance to operate our long-lived assets as well as providing responsibly produced products to expanding and cleaner economies.

Given the tragic tailings dam event in Brazil in early 2019, we first want to address tailings management. We recognize that the failure of tailings and other impoundments at any of our mining operations could cause loss of life as well as severe, and in some cases, catastrophic property and environmental damage. As a result, our programs take into account the significant consequences resulting from a potential failure, and we apply substantial financial and technical resources, both internal and external, to the safe management of our active and inactive tailings facilities. We employ a multi-tiered approach to stewardship of our tailings facilities. Our approach starts with site-level operational management and engineering teams supported by our corporate technical experts. Engineers of record prescribe any engineering enhancements that may be required during construction and operations. In addition, we have commissioned external technical review boards comprised of internationally recognized tailings experts that provide independent opinions and guidance on the physical integrity, safety and performance of our facilities. We are committed to addressing the factors that caused past failure events at unaffiliated mines and working with our industry peers, outside experts and civil society stakeholders to continue to identify and share technical good practices to mitigate tailings-related safety and environmental risks. As part of this effort and our culture of transparency, we are disclosing additional information about our tailings storage facilities and tailings management practices on our website. 

During 2018, while increasing mining rates, our global team achieved safe and strong operating results supported by implementation of our Fatal Risk Management program and superior equipment efficiencies. Deploying real-time systems to enhance predictive maintenance and enable higher equipment availability and utilization is core to our operating plans. We are continuing to work with big data analytics to reduce costs and improve productivity across our organization, with the benefit of associated emissions avoidance. Today, approximately 83 percent of the electricity we purchase is generated from renewable and low-carbon sources, and we continue to engage experts to review opportunities to source additional renewable energy to support operational power requirements.

Our operations, many of which are located in arid regions, achieved an 86 percent average water-use efficiency rate. We view our strong water management performance as a strategic driver for stakeholder acceptance to operate our mines as a changing climate is increasing risks associated with physical availability of water. In recent years, we have experienced weather events at certain operations, including intense rainfall in Chile’s Atacama Desert, that have temporarily affected production. The physical risks associated with climate change are evaluated in our sustainable development risk management process, and we are working to enhance the resiliency of our assets to potential near-term and longer-term impacts.

Our principles of accountability to communities are fundamental to our operations and business strategy. Consistent and trustworthy engagement is important for reducing social risks to the business and also in identifying where our investments can have meaningful, long-term impact. Community engagement and development is part of our company’s culture and, since 2007, we have invested over $2 billion in social programs and projects. Currently, we are prioritizing our community investments on the development of skills for our workforce and community members. We want to empower people and communities with the skills and opportunities to construct meaningful futures. 
In accordance with our Human Rights Policy, we continue to implement the UN Guiding Principles on Business and Human Rights to help us identify, prevent, mitigate and address adverse impacts on individuals related to our activities. During 2018, with the assistance of a third-party consultant, we completed a human rights impact assessment at our New Mexico operations. Results of feedback from internal and external stakeholders indicated that the management systems that support our respect for human rights are working well. Nonetheless, the feedback also identified opportunities to improve our programs in areas ranging from deploying targeted training for staff on specific human rights topics to strategic community engagement plans that address misperceptions about our actual environmental impacts. 

Stakeholder expectations for our industry continue to heighten and, as a result, our site-level sustainability programs continue to evolve. This includes implementing 38 performance expectations unanimously approved by ICMM’s Council of CEOs in December 2018. We will incorporate site-level validation of these expectations into the scope of our annual external assurance program and increase the granularity and transparency of our external reporting. 

The rapidly shifting focus on responsible supply chains has led to responsible production being critical to safeguarding market access for the metals we produce. We are engaging in select frameworks, including the Responsible Minerals Initiative, which promote the sourcing of responsibly produced metals throughout the value chain. We intend to pursue the International Copper Association’s recently announced “Copper Mark” at our copper mines. For our brands listed on the London Metals Exchange, we are planning to adhere to the exchange’s evolving requirements on responsible sourcing. We believe that our site-level programs provide a robust platform to address current and future responsible sourcing requirements. 

We believe that the long-term fundamentals for copper are positive, underpinned by its role in the global economy, the trend toward copper-intensive renewable energy and electrification systems and limitations on new supply projects. We are strongly positioned to benefit from increasing copper prices with our large-scale asset base and importantly, a dedicated workforce that is committed to safe production. We believe a workforce comprised of people with varying ideas, perspectives and life experiences makes us stronger, and we are taking steps to further generate inclusion and diversity. 
In closing, we want to thank our many stakeholders for their continued collaboration and interest in our company as we advance another year of enhancing our sustainability programs. 

Respectfully yours,
 

gerald ford signature
GERALD J. FORD

Non-Executive Chairman of the Board
richard adkerson signature
RICHARD C. ADKERSON

Vice Chairman of the Board, President and Chief Executive Officer
gerald ford photo richard adkerson photo
June 6, 2018

Business Ethics Principles of Business Conduct  |  Policies  |  Governance  |  Transparency of Government Payments

principles of business conduct reportBusiness Ethics
We are committed to the highest level of ethical and legal conduct. The Freeport-McMoRan Principles of Business Conduct (PBC) are a commitment to integrity and define the expected behavior of all employees and our Board. We conduct comprehensive training on our PBC, including annual certification by management-level employees. This process consists of computer-based training, as well as a signed certification that the employee understands the PBC and is not aware of cases of non-compliance. Furthermore, managers and supervisors are responsible for ensuring that the employees who report to them understand these principles.

Anti-Corruption
Corruption is sometimes widespread in local government systems and cultures near our operations. We do not tolerate the offering or payment of bribes, kickbacks or other similar payments to any person or organization or government official to secure advantages for our business. Likewise, we do not accept any of these payments. Our Anti-Corruption Policy and Guidelines require compliance with the U.S. Foreign Corrupt Practices Act (FCPA) and other relevant anti-corruption laws, including local laws.

We deployed a new anti-corruption online training module in 2017. The training is mandatory for annual completion by select groups of employees utilizing a risk-based approach. For example, senior-level employees who may interact with government officials are required to complete the training. The online training does not replace our existing classroom training programs; rather, it supplements our existing systems and extends the reach of our overall compliance efforts.

In recognition of the potential legal liability that could result from actions of our business partners under the FCPA and other laws, the company implements an online due diligence platform, the Freeport Compliance eXchange (FCeX). FCeX is a survey-based software platform designed to assess risk in the areas of anti-corruption, international trade and human rights. FCeX has enhanced the company’s ability to identify, assess and mitigate compliance risks.

Annually, we perform company wide audits with the assistance of our internal audit firm to assess risk and plan for the following year’s audit strategy. Formal fraud risk assessments have been implemented at Atlantic Copper, El Abra, Cerro Verde, PTFI and our corporate offices and mapped with business controls which are tested and reviewed annually. The fraud risk assessments consist of more than 100 risk scenarios across more than 15 process areas, such as Asset Management, Purchasing, Payables and Financial Reporting. All of these risk assessments include corruption as a risk factor.

Information and Reporting
Among other reporting mechanisms, Freeport-McMoRan maintains a Compliance Line to provide guidance and assistance to workforce members with any questions or concerns related to our PBC, policies or procedures. To encourage our workforce to report potential violations of business conduct, our Compliance Line allows anonymous reporting. 

During 2018, 257 reports were made through the Freeport-McMoRan Compliance Line relating to various topics, including employee workplace conduct, environment, health and safety, protecting company assets and conflicts of interest. All reports are investigated and, if substantiated, appropriate disciplinary action is taken, up to and including termination of employment. 
 

business ethics

PHOTO DESCRIPTION: Freeport-McMoRan’s Global Compliance Team tours the Cerro Verde mining operations during the September 2018 meeting held in Arequipa, Peru.

Stakeholder Engagement

We inform, consult and involve communities and partners in order to develop and improve our policies, programs, projects and initiatives. We formally engage with community stakeholders across our portfolio, as well as economic partners and development institutions, government regulators, non-governmental organizations (NGOs), community leaders and general members of the public. Annually, hundreds of entities are engaged via community foundations, formal grievance systems, community liaison officer interactions, workshops, participatory group panels, town hall meetings and topical surveys. Engagement also occurs through regulatory consultation processes with governmental entities and community groups, including with indigenous peoples. 

stakholder

Consistent dialogue allows us to work alongside community members to avoid and mitigate impacts and capture opportunities to implement projects that drive sustainability. Capacity building through engagement is critical to assisting communities to be resilient to downturns in commodity cycles and in planning for eventual closure of our operations. 

In 2018, our corporate team engaged with over 100 investor organizations, sustainability analyst firms, banking institutions, NGOs, and multi-sector company sustainability teams regarding our programs and performance. Many of these organizations include multiple members or affiliations, thus expanding the reach of our engagement program. Our corporate team also works closely with our commodity sales departments to engage both downstream customers and international governmental agencies on sustainability programs and addresses specific environmental and social areas of interest that could affect access to markets for our various products. In addition, our operational-level teams regularly engage locally with community stakeholders, development institutions and civil society organizations. We believe that effective stakeholder engagement can help reduce sustainability-related risks and enable us to continue to deliver positive contributions to society. 

In 2019, there has been increased interest from various organizations in our tailings management program following recent catastrophic tailings dam failures at unaffiliated mines. We are committed to engaging on specific measures associated with our tailings management and stewardship program. 

Example Stakeholder Group Interaction Regarding Our Sustainability Focus Areas

Biodiversity | Community Engagement and Development | Corruption | Climate-Related Impacts and Opportunities | Human Rights
Labor RelationsProduct Stewardship | Health and Safety | Tailings | Water Supply and Management

Biodiversity

Academia

Habitats within and near our operations provide local educational opportunities aligned with our focus on science, technology, engineering and mathematics (STEM)

Workforce

Through annual biodiversity photo competitions

NGOs

Partnering with organizations such as Wildlife Habitat Council to improve habitats and foster educational opportunities

Community Engagement and Development

Academia

Arizona State University Lodestar training program for community capacity-building
Thunderbird School of Global Management DreamBuilder program for free entrepreneurial training

Foundations/Trust Funds

Funding, governance and sustainable investment decision support

Governments

Engagement with the company regarding long-term capacity building in education, healthcare and economic development

Local and Regional Communities (including Indigenous Peoples)

5-year community engagement and development plans with community engagement methods and development objectives

Investment Community

Briefings and reporting on our social development programs

Workforce

Volunteerism and Matching Gifts program

NGOs

Engagement with local development organizations to support capacity building in communities

Anti-Corruption

Governments

Implementation of the Extractive Industries Transparency Initiative (EITI)

Workforce

Anti-corruption training and awareness programs

Suppliers

Communications on expectations of proper business conduct, including our Supplier Code of Conduct

Climate-Related Impacts and Opportunities

NGOs

Multi-year process to address the core reporting requirements of the Task Force on Climate-Related Financial Disclosures (TCFD)

Suppliers

Coordination with OEMs on technology advances for efficiency and safety

Human Rights

Customers

Engagement regarding our company-wide human rights programs and performance

Governments

Engagement regarding requests for impartial and independent investigations to security incidents, and human rights training/socialization of company policies and programs with government bodies and government-provided security

Local Community

Human Rights training and communications regarding grievance mechanisms

Investment Community

Participation in the Corporate Human Rights Benchmark (CHRB) and program updates via teleconferences, meetings and email information exchange

NGOs

Active promotion and involvement in the Voluntary Principles on Security and Human Rights

Workforce (including security contractors)

Human Rights training programs and communications regarding grievance mechanisms

Labor Relations

Governments

Engagement and coordination with governmental bodies regarding status of collective bargaining agreements

Investment Community

Updates via teleconferences, webcasts and in-person meetings 

NGOs

Engagement with the Business and Human Rights Resource Center regarding labor matters

Workforce

Ongoing engagement regarding schedule, wages, benefits, worker conduct and safe workplaces

Product Stewardship

Governments

Engagement and monitoring of governmental bodies regarding current or emerging compliance requirements associated with market access for our products

Trade Associations

Participating in and monitoring product stewardship related agendas and responsible sourcing frameworks

Customers

Proactive communication in the value chain concerning common stewardship and sustainability performance attributes of our operations and products 

Health & Safety

Governments

Interaction with regulators, including operational inspections

Investment Community

Performance updates via teleconferences, webcasts and in-person meetings

Workforce (including unions)

Workforce training and outreach regarding safety performance, particularly our Fatal Risk Management program employees and contractors

Tailings Management and Stewardship

Governments

Engagement regarding regulatory requirements and closure planning

Local Community

Engagement with community members regarding the elements of our Tailings Management and Stewardship Program

Investment Community

Correspondence via teleconferences, meetings and information exchange

Water Supply and Management

Governments

Coordination on strategies for long-term water supplies; engagement regarding regulatory obligations and projects to protect or enhance water quality 

Local Community

Engagement with community groups, including indigenous peoples, on long-term mutually beneficial options for water supplies; coordination on projects to protect or enhance access to clean water for populations near our operations


The table below is a broader presentation of our engagement activities with stakeholder groups.

Stakeholder Groups

Typical Areas of Interest

Typical Methods of Engagement

Communities | Customers | Employees and Contractors | Governments | Indigenous Peoples |
NGOs | Shareholders and Financial Community | Suppliers | Unions

Communities

Local communities have important needs and interests associated with our operations and expansion projects.

  • Employment opportunities
  • Economic development
  • Education
  • Health and safety 
  • Environmental protection
  • Land and water stewardship
  • Public community engagement forums (e.g., Community Partnership Panels)
  • Community Liaison Officer engagement
  • Formal governance structures of community trust funds
  • Local media placements 
  • Specific meeting requests
  • Community grievance mechanisms

Customers

The natural resources that we produce are essential to the world’s economies. Our products are sold to customers in the global marketplace.    

  • Quality products
  • Delivery commitments
  • Regulatory compliance
  • Product stewardship
  • Sustainability programs 
  • Site-level sustainability audits or data requests 
  • Daily interactions with our sales department
  • Customer satisfaction surveys
  • Operations tours 
  • Product information sheets
  • Supply chain sustainability surveys 

Employees and Contractors

At December 31, 2018, we employed a diverse workforce of approximately 26,800 employees and 38,800 contractors across our operations.

  • Health and safety
  • Operational change 
  • Workforce management 
  • Alignment with community interests 
  • Training and career development 
  • Health and safety programs and initiatives
  • Timely site-level dissemination of company news and events 
  • Two-way communications with supervisors and management 
  • Direct home mailings 
  • Freeport-McMoRan Compliance Line
  • Company intranet 
  • Principles of Business Conduct
  • Surveys and evaluations

Governments

We work with governments at national, regional and local levels.    

  • Resource access 
  • Environmental protection 
  • Taxes and royalties 
  • Economic development 
  • Water projects 
  • Workforce development
  • Security and human rights
  • Interaction with company management 
  • Regulatory processes and requirements 
  • Governmental representation at stakeholder engagement forums 
  • Engagement via national and international trade associations 

Indigenous Peoples

We engage with the indigenous Papuans in Papua, Indonesia; Native Americans in the United States; and the indigenous communities of Alto Loa in Chile.  

  • Land and water stewardship
  • Education 
  • Employment and career development 
  • Cultural heritage     
  • Local leadership by tradition or election 
  • Training and capacity-building programs 
  • Workshops and meetings 
  • Community Liaison Officer engagement
  • Community development programs and trust funds 
  • Grievance mechanisms 

NGOs

We interact regularly with NGOs (international and local) focused on a broad range of sustainability topics. These groups frequently include development agencies, educational institutions, civic organizations, environmental protection groups and groups interested in issues related to human rights.   

  • Economic development 
  • Education 
  • Human rights 
  • Health and safety
  • Biodiversity and environmental performance 
  • Corporate governance 
  • Ethics 
  • Public health
  • Formal partnerships
  • Mine tours/site visits 
  • Research and studies 
  • Inquiries and requests for information 
  • Project proposals 
  • Conference participation

Shareholders and Financial Community

We regularly work with institutional investors, securities analysts, socially responsible investment (SRI) analysts and investors, banks, rating agencies and the financial media. 

  • Financial performance
  • Access to capital 
  • Human rights 
  • Health and safety 
  • Environmental performance
  • Climate-related impacts and opportunities
  • Security matters
  • Public news releases and presentations 
  • Public filings with the Securities and Exchange Commission
  • Public presentations to the investment community
  • Communications between our Sustainable Development department and the SRI community
  • Annual meeting of stockholders/solicitation of proxies 
  • Sustainability reporting 
  • Topical survey participation

Suppliers

Our suppliers range from local businesses near our operations to large, international companies.    

  • Adherence to our Supplier Code of Conduct
  • Safety and environmental stewardship
  • Long-term business relationships 
  • Agreement terms 
  • Contract administrators
  • Community development representative interaction with local businesses
  • Entrepreneurial programs

Unions

Employees at certain operating sites are represented by unions according to applicable agreements.    

  • Wages and benefits 
  • Work schedule 
  • Health and safety 
  • Job security    
  • Communications with employees and labor representation on workforce related topics per governmental requirements and Collective Labor Agreements
PHOTO DESCRIPTION: In 2018, Cerro Verde partnered with over 1,100 community members, engineering associations, government institutions and local universities to test air and water quality around its operations. Above, participants examine air filter data after 24 hours of monitoring.

Sustainable Development Risk Register

The Freeport-McMoRan Sustainable Development framework is based on operation-specific factors and influences, including regional context, type and stage of operation and social setting. Essential to this framework is the Sustainable Development Risk Register process, which prioritizes the most significant risks that could have negative consequences to our business and our stakeholders across areas including health and safety, respect for human rights, environmental management, community development and economic impacts. 

Operating the controlled riverine tailings management system is a key focus at PTFI. The leveed deposition area contains the footprint of coarser tailings and other sediments being colonized by aquatic plant species.

The Sustainable Development Department and senior, multi-disciplinary experts support operations so that prioritization processes are consistent with corporate procedures and provide associated thought input. Our Sustainable Development Risk Register process was updated during 2018 to include additional categorical topics with more extensive definitions for risk evaluation, which include climate-related impacts and consideration of the potential for human rights impacts across topics. This update is in part intended to reflect due diligence priorities of actors in the metals value chain, including members of the Responsible Minerals Initiative. In 2018, we also integrated an SDG alignment assessment into the process to track specific efforts in avoiding impediments to applicable goals. Cross-functional disciplines from all operations participated in a series of tutorials on application and use of the enhanced Risk Register process, and the revised process was implemented in the second half of 2018. 

Sustainability Focus Areas identified through this process are annually reviewed by our Sustainable Development Leadership Team and communicated to our Board. Our current areas of focus are described throughout each topic in Sustainability.

PHOTO DESCRIPTION: Active Tailings Storage Facilities (TSFs) are continually monitored for embankment dam structural stability and environmental aspects such as dust generation potential. Above, buttress construction provides additional stability at the Sierrita TSF near Green Valley, Arizona.

Sustainability Focus Areas

sustainability-focus.jpg

Sustainability focus areas identified through the Sustainable Development Risk Register process are reviewed annually by our Sustainable Development Leadership Team and communicated to our Board of Directors. The focus areas have not changed significantly over recent years and are described here and throughout the sustainable development section of our website.

 

Sustainability Focus Areas

Anti-corruption

As a U.S.-based mining company with substantial assets located outside of the U.S., our business may be adversely affected by issues related to corruption. We maintain a robust anti-corruption training and reporting program in addition to our Principles of Business Conduct training. Any violation of the U.S. Foreign Corrupt Practices Act or other anti-corruption laws of jurisdictions in which we operate could result in significant criminal or civil fines and penalties, litigation and loss of operating licenses or permits.

Biodiversity

We recognize that climate change poses significant near-term, medium-term and longer-term challenges for society. We also understand that climate change presents risks and opportunities for our operations and our financial performance. We aim to manage and mitigate, to the extent possible, climate-related risks to our business with the ambition of being a net positive contributor to climate solutions primarily through delivery of copper to global markets.

Climate-Related Impacts and Opportunities

We recognize that climate change poses significant near-term, medium-term and longer-term challenges for society. We also understand that climate change presents risks and opportunities for our operations and our financial performance. We aim to manage and mitigate, to the extent possible, climate-related risks to our business with the ambition of being a net positive contributor to climate solutions primarily through delivery of copper to global markets.

Community Engagement and Development

Our social and economic development programs are designed to be responsive to issues raised by communities, including vulnerable groups and indigenous peoples, and to help us maintain good relations and avoid disruptions of operations. Nevertheless, social and political instability in the areas of our operations may adversely impact our operations.

Health and Safety

The safety of our global workforce is our highest priority. Through implementation of our Fatal Risk Management program, we aim to eliminate fatalities by identifying and implementing critical controls and delivering multi-faceted training and enhanced communications throughout our workforce.

Human Rights

Respect for human rights is a core value and we continue to conduct our operations consistent with the Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights. We are advancing site-level human rights impact assessments within our portfolio. Our operations may be adversely affected by security risks stemming from events including political instability, labor strikes and civil strife. The Voluntary Principles on Security and Human Rights serve as guidelines for our security and human rights programs.

Labor Relations

Our product stewardship team engages downstream customers, upstream suppliers, industry associations and international governmental agencies on operational and product-specific sustainability issues. We believe that proactive engagement on product stewardship issues is mandatory to address risks associated with market access for our products.

Product Stewardship

Our product stewardship team engages downstream customers, upstream suppliers, industry associations and international governmental agencies on operational and product-specific sustainability issues. We believe that proactive engagement on product stewardship issues is mandatory to address risks associated with market access for our products.

Tailings Management and Stewardship

Through our tailings management and stewardship program, we employ substantial engineering expertise, technological monitoring, and operational and corporate management oversight to design, build, operate and monitor these facilities to minimize risk to employees, neighboring communities and the environment. We have a strong commitment from our Board and executive management team to provide the necessary resources to protect safety.

Water Supply
and Management

We recognize the importance of responsibly managing water resources at mining operations in both arid and wet regions. While all of our mining operations require secure and reliable quantities of water for mining and ore processing, most of our operations are located in arid regions of North America and South America. We maintain a global water management program designed to increase water use efficiency in our processes while minimizing the use of fresh water.

PHOTO DESCRIPTION: The compacted centerline Tailings Storage Facilities (TSF) at our Cerro Verde operations in Peru continue to be examples of good practice of TSF design and operations. The Linga TSF (above) achieves robust structural stability and efficient water management.

Product Stewardship

Diversity

Product stewardship is critical to our business across the suite of minerals and metals we produce. It entails a variety of activities that allow continued market access for our products. These range from complying with chemicals management regulations related to transport and labeling to working with international NGOs to promote the use of sound science when assessing the health, safety and environmental risks associated with our products. Over the last few years, product stewardship has evolved to include demonstration of responsible production of our products to downstream users. As a result, we are enhancing our supply chain due diligence while continuing to implement increasingly advanced performance standards for mining and refining. 

To address these needs, our cross-functional Product Stewardship Team engages downstream customers, responsible sourcing initiatives, commodity and trade associations as well as international governmental agencies on operational and product-specific sustainability topics. The team is led by our Vice President-Environmental Services and Sustainable Development and our Director-Product Stewardship with active participation by our global product sales, legal and business unit technical teams.

During 2018, the team addressed topics including: 

  • Our participation and engagement with multiple commodity, business associations’ and international governmental organizations’ development of responsible sourcing frameworks including the International Copper Association’s “Copper Mark” program concept
  • Individual due diligence requests from downstream organizations for information related to our sustainability policies, programs and performance 
  • Evolving regulations that may require additional product labeling for certain of our products 
  • Enhancements to our Sustainable Development Risk Register assessment process that includes additional sustainability-related topics, such as climate-related impacts, that are of interest to value chain partners 
  • Further development of life cycle assessments for our products – quantifying the environmental impacts of our products and considering inputs such as water, energy and raw materials as well as releases to water, land and air 
  • Compliance with global chemical legislation (e.g. the European Union’s Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) program, U.S. Toxic Substances Control Act, and developing programs such as Korea REACH) 
  • Moving forward, we will focus on advancing its product stewardship strategy by continuing to map its value chains – from raw material sources to end users – continuing to collaborate with key stakeholders and industry associations to advance responsible production and consumption and work closely with customers to understand their evolving requirements.

product_stewardship

PHOTO DESCRIPTIONS: (top & bottom) On January 9th, 2018, Climax Molybdenum Company celebrated the production of 2 billion pounds of molybdenum, the same year Climax celebrates its 100th anniversary. Molybdenum improves the strength of low alloy steel, making the element ideal for lightweight applications such as fuel-efficient vehicles, power generation turbines, and aerospace components.

Performance Targets

We set company-wide performance targets to support key objectives, including in areas prioritized in our Sustainable Development Risk Register.

 

Performance Targets  
Business Ethics

Provide comprehensive training on our Principles of Business Conduct, including annual certification of management-level employees
 
target met All employees were trained in 2018, including a 100% certification rate of management-level employees.


With our online training module, annually train 90% of selected employees who interact with, or have the potential to interact with, government officials on anti-corruption laws, regulations and company policies and procedures
 
target met In 2018, 100% of the employees selected to participate in the online training completed the course.
Workforce
 
Increase the percentage of women in our workforce, including representation in managerial roles, to 15%
 
target not met
Women comprise 13% of our employee population and hold 12% of all managerial positions.
Health & Safety
Incur zero fatalities target met
We incurred zero fatalities at our operations in 2018.
 

Meet company-wide total recordable incident rate (TRIR) of 0.70
 
x target
At 0.71 for 2018, we did not meet our target TRIR.
Human Rights

Incur zero gross human rights violationsa at our operations caused by employees and contractors
 
check target We did not incur any gross human rights violations at our operations caused by employees or contractors.
Communities

Invest (in aggregate) 1% of the average of the previous three years' annual mining operations revenue (as reported in Freeport-McMoRan's audited consolidated financial statements) in community programs, including in-kind support and administration
 
check target Approximately $155 million was invested in community programs across our operations ($2 million above our 2018 target).
Environment

Incur zero significant environmental events (rating of three or higher on our Sustainable Development Risk Register)
 
x target
During the year, we incurred one significant environmental event related to fugitive dust from Sierrita's tailings impoundmentb.

Incur zero penalties in amounts exceeding $100,000.
 
check target
Our operations did not incur any penalties exceeding $100,000.
 
Note:  All performance targets are annually recurring.
a. There is no uniform definition of gross human rights violations under international law; however, the United Nations Office of the High Commissioner report: The Corporate Responsibility to Respect Human Rights – An Interpretive Guide, provides guidance on identifying such types of violations.
b. The event mostly affected the community rather than environment; this event was a significant violation of Sierrita's air quality permit and may result in future penalties.
   

External Initiatives

Added to our policies are external standards and initiatives in which we participate. Taken collectively, this set of internal and external commitments form the operational boundaries for working toward sustainable development. Examples of external standards and initiatives that influence our sustainable development programs are presented in the table below.

External Standards and Initiatives

  • Business for Social Responsibility (BSR)
    We have been an active participant in the Business for Social Responsibility multi-industry human rights working group since it was first established in 2012.
  • Corporate Human Rights Benchmark (CHRB)
    We participate in and engage with the CHRB on our human rights transparency and performance.
  • Extractive Industries Transparency Initiative (EITI)*
    We endorse the EITI and participate in country-level implementation in Indonesia and Peru.
  • Fund for Peace Security, Rights and Development Roundtable
    We participate in the Fund for Peace Security, Rights and Development Roundtable as part of continual improvements to our human rights programs. 
  • Global Reporting Initiative (GRI)
    We have reported according to the GRI guidelines since the 2005 reporting period.
  • ICMM (Sustainable Development Framework)*
    We have been an active member of ICMM since it was established in 2001. 
  • International Organization for Standardization (ISO) 14001
    Our mining operations maintain Environmental Management Systems certified to ISO 14001 standards.
  • Occupational Health and Safety Assessment Series (OHSAS) 18001
    We maintain a corporate group certification to OHSAS 18001 
  • Sustainability 50
    We participate in Sustainability 50’s multi-industry dialogue on human rights and other sustainability topics.
  • Task Force on Climate-Related Disclosures (TCFD)
    We initiated a multi-year process to adopt applicable reporting recommendations of the TCFD.
  • UN Guiding Principles on Business and Human Rights (UNGPs)
    We are committed to the UNGPs and we are integrating human rights considerations across our business.
  • Voluntary Principles on Security and Human Rights*
    We have been an active member of the Voluntary Principles on Security and Human Rights since it was first established in 2000.
  • Wildlife Habitat Council (WHC)*
    We have been a member of the WHC since 2006 and have 18 conservation and education based programs across the mining portfolio that are certified through WHC’s Conservation Certification process.
* Indicates direct employee participation in committees or governance bodies and/or company funding in addition to membership dues.

Industry Associations
We actively participate in associations at international, national, regional and local levels. Many of these organizations (examples listed below) have sustainability-related programs or initiatives. We maintain membership in these organizations and directly participate in committees or governance bodies and/or provide funding in addition to membership dues.

external standard and initiatives