For the purposes of this report Alumina Limited has identified the investment community and government as direct stakeholders ie, they either hold a direct interest in the Company or influence over the operation of AWAC business that is Alumina Limited's principal interest.
- Institutional investors
- Retail shareholders
- Fund managers and analysts
- Ratings agencies
- Financial markets
- Various governments in whose jurisdiction AWAC operates.
We recognise that local communities living near the AWAC operations, managed directly by Alcoa, as well as interest groups and not-for-profit organisations may also be interested in this update.
Engagement with stakeholders
Alumina Limited engages regularly with stakeholders through:
- Investment roadshows in Australia and overseas
- Meetings with institutional investors
- Results presentations and our Annual General Meeting (available on our website)
- Program of shareholder communication, including opportunities for feedback.
Through these engagement opportunities, we will seek feedback on the usefulness of this sustainability update and tailor future reporting accordingly.
AWAC can be considered an investor in bauxite and alumina market via AWAC. Alumina Limited's only investment is its 40 interest in AWAC. Alumina Limited's stakeholders are those groups that have a direct relationship with the Company. Stakeholders in the AWAC business are identified by Alcoa, the manager/operator of AWAC.
Frequency of engagement with Stakeholders
Alumina Limited representatives meet regularly with major shareholders and market analysts. Alumina Limited has a two-way communication strategy with its shareholders to interact.
AWAC Stakeholder engagement
In relation to AWAC, Alcoa maintain stakeholder relationships, formal and informal, with customers, suppliers, government agencies, employees, lenders, and shareholders.
The Alcoa Community Framework is the principal way Alcoa as operator of AWAC, manage and measure their engagement with stakeholders at the community level. The framework helps AWAC’s various locations define the stakeholder groups with which to engage and identifies tools and approaches to ensure that engagement with these stakeholders is robust, effective, and transparent. It also accommodates the differing sizes and stakeholder engagement needs of AWAC’s facilities and accurately measures and compares their efforts. Each year, a location completes a dashboard that evaluates its progress on five key engagement levers (public strategy plan, communications, stakeholder engagement, community partnerships, and employee engagement), taking into consideration its activities around environment, infrastructure, policy, and community relationships. As part of the framework, some of AWAC’s locations have formally established community advisory boards (CABs) comprising external community members, NGO leaders, and local officials who are well-versed in the needs of their local communities. CABs meet regularly to provide open, two-way communication, ensuring that all challenges and opportunities are discussed and responded to quickly. Although the intent is for issues and concerns to be resolved at the location level, occasionally they are discussed at the regional or global level within the company depending upon the issue or the identified risk or opportunity. We also develop relationships with appropriate stakeholders at the regional and global levels.
AWAC stakeholder engagement in action: Environmental Improvement Plans
Many of our Australian operations engage with local communities to develop an environmental improvement plan, which is a public commitment to continuously improve environmental performance, reduce environmental impacts, and develop more sustainable practices. The draft plan undergoes collaborative external review, with adjustments incorporated based upon that review. The final plan, which sets clear targets for improvement, is signed by participating stakeholders. These stakeholders also monitor our progress in achieving the targets and annually review the plan. Examples of our environmental improvement plans can be found on the Alcoa of Australia website.
The following key issues were raised by, or discussed with, stakeholders in 2015.
2015 Stakeholder issues
|Alcoa of Australis||The Australian Conservation Foundation released a report examining the top 10 greenhouse gas (GHG) emitters in Australia. The report used the latest publicly available GHG emissions data for each company. Alcoa of Australia was seventh.||No formal inquiries from stakeholders were received regarding the report. By its nature, aluminium production is energy intensive, creating a significant greenhouse footprint. For more than two decades, we have been actively engaged in efforts to reduce our GHG emissions.|
|Anglesea, Australia||Following the closure of our Point Henry smelter in 2014, some members of the Anglesea community called for the Anglesea power station and coal mine to be shut down instead of sold. The station and mine had provided power to the smelter||Consultation occurred via community meetings, face-to-face meetings with key stakeholders, and newspaper advertorials to keep interested community members informed of progress relative to the sales process. After a sale could not be concluded, we shut down the power station and mine in August 2015. We provided grants totalling US$168,750 to 14 long-term community partners to help them transition to a future without Alcoa. This was in addition to the US$3.75 million contributed in 2014 to the Geelong Region Innovation and Investment Fund to support job creation projects to strengthen and diversify the regional employment base. Engagement with the local community in 2016 regarding the final mine closure plan continues.|
|Booragoon, Australia||Australian Manufacturing Workers’ Union members protested over employee re-rostering and claims we had instructed our suppliers on how to approach contract negotiations for enterprise bargaining agreements.||The union’s claims were refuted through formal meetings and written correspondence. It was stated that re-rostering had been carried out in accordance with labour agreements, and AWAC do not interfere in negotiations between suppliers and their employees.|
|Kwinana, Australia||Two residential developments were proposed less than 1.5 kilometres (0.9 miles) from AWAC's Kwinana refinery’s bauxite residue storage area and mostly within the extended Kwinana air-quality buffer adopted by the Western Australian Planning Commission in September 2010. In 2014, we opposed the residential developments and were successful in proceedings before the State Administrative Tribunal, which prevented progress of the development. This outcome is now subject to a further legal challenge by the property developers.||In 2015, briefings were held with local and state government representatives, the Kwinana Industrial Council (KIC), and the KIC community consultative committee to call for greater controls to protect the industrial area from development. Via a public statement on Alcoa's website. The state government’s proposed legislation to formalize a protection area around the western trade coast industrial area, which includes the Kwinana refinery was welcomed. The legislation is an important planning tool that will help protect the state’s valuable Kwinana industrial assets and avoid future land-use conflicts, and have endorsed the legislation, which will be introduced in 2016.|
|Kwinana and Pinjarra, Australia||Two separate potential low-level asbestos-exposure incidents involving contractors occurred at the Kwinana and Pinjarra refineries. These resulted in an audit of our asbestos-management procedures by the Department of Mines and Petroleum, which recommended minor modifications to further strengthen our asbestos-management controls.||The director of health and chief medical officer said in workforce meetings and media statements that the risk of any health impact to the contractors working on the jobs was considered extremely low. This was due to their limited exposure to asbestos-containing material, the type of asbestos, and the short duration of the tasks undertaken.|
|Pinjarra, Australia||The Australian Manufacturing Workers’ Union started a petition calling for WorkSafe to conduct an inquiry into alleged workplace bullying at our Pinjarra refinery. This issue and mental health concerns were also raised in the Western Australian Parliament.||It was highlighted to the unions and employees via face-to-face and written communications the avenues available to report workplace bullying and complaints. We also promoted the many initiatives, services, and employment conditions in place to help equip employees and their families to deal with various work and life challenges. In addition, mental health awareness training was provided to all employees.|
|Portland, Australia||To reduce costs at the Portland Aluminium smelter, it was decided to sell the 27-year-old MV Portland vessel and secure a license to use foreign-flag vessels for 12 months. After the MV Portland’s final voyage in November 2015, members of the Maritime Union of Australia refused to sail the ship to Singapore to be sold. The Australian Fair Work Commission and the Australian Federal Court ordered the industrial action to stop. Despite this, the MV Portland remained stranded in the Port of Portland at the end of 2015.|
|Portland, Australia||Due to its electricity intensity, the aluminium smelting industry would be greatly impacted by the Australian federal government’s Renewable Energy Target (RET) scheme to a far greater extent than any other Australian industry. Estimates show the RET liability associated with Australian aluminium smelting to be in the range of US$52.5 million to US$60 million a year and likely to increase.||After formally engaging relevant stakeholders through face-to-face meetings and written correspondence, we welcomed support from both major political parties to exempt the aluminium smelting industry from RET. This will enable the industry to remain internationally competitive and a significant employer in regional Victoria.|
|Wagerup, Australia||In June 2012, approval was granted by the Western Australia minister for environment to allow noise emissions to exceed or vary from the prescribed standard. This approval does not allow increased noise emissions from our Wagerup refinery, but rather brings current noise levels within the regulations.||A noise monitoring program required as part of the approval showed refinery noise emissions during 2014 and 2015 were demonstrably lower than those recorded at the same locations during 2002 and 2003. Also required to undertake noise monitoring during weather conditions most conducive to noise propagation to measure refinery noise levels compared to the assigned levels. This monitoring found refinery noise was lower than the assigned levels most of the time. Elevated noise levels were recorded on a small number of occurrences in specific areas of the refinery. We are implementing action plans to address the noise at the source. The results of the monitoring program were shared with the Wagerup Community Consultative Network, the Department of Environment Regulation, and interested parties through face-to-face meetings, advertisements in local and state newspapers, and publication on Alcoa of Australia's website.|
|Juruti, Brazil||Grupo de Soluções em Alimentação, which buys fish farmed through our Family Agriculture Support Program for use in the Juruti cafeteria, required that the fish meet production regulations established by the local sanitary authority.||In partnership with the Sustainable Juruti Fund, the fish farmers are working to obtain certification from the sanitary authority.|
|Western Australian Mining Operations||Exploration drilling near the township of Dwellingup commenced in 2015 following consultation with nearby landholders at the end of 2014. The initial phase of the program resulted in some concern about disturbance of the forest in drilled areas.||We committed to modify our drilling practices, where safe and practical, to reduce the disturbance and visual impact of drilling. We also committed to restoring formal paths and tracks impacted by the movement of drilling equipment. We communicated these measures to landholders in a July 2015 program update letter. We have continued to communicate one-on-one with interested neighbours as needed. The results of the exploration program will be shared with the community in the second half of 2016|
|Western Australian Mining Operations||Energy security and access to long-term, competitively priced natural gas is a strategic risk for our refining assets in Western Australia. We are the state’s largest user of natural gas, consuming approximately 25% of total domestic supply. Our key Western Australia gas contracts start to roll off toward the end of the decade and expire during 2020. Limited competition and a focus on exporting the state’s gas as liquefied natural gas made it difficult to secure new long-term contracts for the volume of gas needed.||Following extensive negotiations, Alcoa of Australia announced in April 2015 that it had secured a new 12-year gas supply agreement. Commencing in 2020, the agreement is for an initial supply of 120 terajoules per day of natural gas. Combined with a number of smaller agreements, this means we have secured approximately 75% of our Western Australia natural gas requirements to replace the existing long-term contracts.|
|Juruti and Sao Luis, Brazil||Government officials and community leaders requested a visit to our bauxite residue storage areas following a fatal spill of toxic mud from an iron ore mine owned by Samarco, a Brazilian company owned equally by Vale and BHP Billiton||AWAC management coordinated visits to its Juruti and São Luís locations for representatives from the cities’ legislative assemblies, city councils, community councils, and non-governmental organizations. They educated the groups on the stringent management of bauxite residue processes and also provided a tour of both active and rehabilitated storage areas.|
|Juruti, Brazil||The mayor of Juruti requested an update on pending items from the Juruti mine’s Positive Agenda, where a commitment was made to voluntarily invest in community initiatives in education, health, security, infrastructure, and social assistance in the Juruti region.||Several meeting were held with members of the prefecture to convey that progress on the remaining six of 54 agenda items is being made and that the aim is to complete them in 2016.|
|Paranam, Suriname||Curtailed the remaining capacity at our refinery in Paranam in November 2015.||Conducted employee and stakeholder information sessions prior to and at the time of the curtailment announcement. Also held multiple negotiation sessions with representatives of both hourly and salaried employees to establish fair and equitable severance packages. A total of 221 of 224 salaried employees accepted the final severance proposals. Alcoa Foundation also provided grants to support entrepreneurial efforts. The union representing the hourly employees filed a court action in December 2015 seeking continued negotiation of the severance package. A hearing in March 2016 resulted in the judge asking the parties to continue to negotiate, and an agreement was reached later that month. Discussions continued with the government of Suriname regarding options to sustain the bauxite industry in the future while acknowledging the need to curtail production at the Paranam refinery.|
|Point Comfort, Texas, USA||Partial curtailment of refining capacity.||AWAC management met with community leaders to provide insight into the market conditions behind the curtailment and reinforce Alcoa’s commitment to the community. Also re-established the Point Comfort Citizens Panel and Community Advisory Board, both of which had been dormant for several years. Also met frequently with local union leaders to fully coordinate communications and procedures for offering a voluntary quit package to collective bargaining unit members.|