The mining and minerals industry plays a major role in global economics, but it also faces a wealth of challenges in terms of compliance and risk management. As regulatory scrutiny grows and stakeholder expectations evolve, mining companies must traverse an extremely complex landscape of environmental, social, and governance (ESG) risks, health and safety concerns, supply chain challenges, reputational risk, and more.
Old-fashioned, manual, and transactional risk management processes don’t cut it anymore. Compliance teams must manage their programs holistically, ensuring that the processes and tools are efficient and able to meet these risks head-on, and drive their programs towards success.
Key Areas of Mining Compliance
Minerals operations are complex. There’s many areas of compliance, ethics, and risk that need to be managed, including:
Supply Chain Due Diligence: Mining companies must ensure their supply chains are transparent, ethical, and compliant with regulations like the corporate sustainability laws. This means regularly assessing suppliers for risks related to human rights and environmental impact, and maintaining thorough documentation to avoid legal and reputational issues.
Financial Reporting and Anti-Corruption Laws: Laws such as the Dodd-Frank Act require mining firms to disclose payments to governments and ensure their supply chains are free from conflict minerals and corruption. Transparent reporting helps prevent fraud and builds trust with investors and the public.
Anti-Bribery and Anti-Corruption (ABAC) Compliance: Laws like the UK Bribery Act strictly prohibit bribery and demand strong compliance programs. Violations can result in hefty fines and reputational damage, especially in countries with high corruption risks.
Data Protection and Privacy: With increased digitization, mining companies must protect sensitive data and comply with regulations like GDPR. This includes securing personal and operational data, managing consent, and ensuring data is handled responsibly to avoid breaches and penalties.
Environmental Impact and Sustainability: Strict environmental laws require mining companies to minimize pollution, manage waste, and rehabilitate land post-mining. Non-compliance can lead to fines, lawsuits, and loss of community trust.
Health and Safety Regulations: Worker safety is paramount, with agencies like MSHA mandating safety protocols, training, and incident reporting. Failing to meet these standards can result in penalties, shutdowns, and reputational harm.
Labor Laws and Human Rights: Mining firms must uphold fair labor practices and human rights, including prohibiting forced labor and respecting indigenous rights. Adherence to global standards is critical to avoid legal and reputational risks.
Export Controls and International Trade Compliance: Cross-border operations require compliance with export controls and trade laws. Violations can result in shipment delays, fines, and restrictions on business activities.
Best Practices for Compliance Effectiveness and Success
To effectively manage the myriad environmental risks and regulations expected of this industry, mining companies should implement the following best practices:
1. Implement Strong Systems and Controls
Establish centralized compliance solutions that integrate various aspects of compliance management, including third-party due diligence, disclosure management, and reporting. Automation and workflow tools can streamline risk management and governance processes and improve efficiency.
2. Conduct Comprehensive Risk Assessments
Regularly assess potential ESG, cyber, ABAC, and other risks specific to mining operations, including those within third-party and subcontractor activities. Use these assessments to inform compliance strategies and resource allocation.
3. Develop Clear Policies and Procedures
Create and maintain comprehensive policies and procedures for dealing with government officials, managing third parties, and ensuring compliance throughout the extended enterprise. These should be regularly updated to reflect changing regulations and best practices.
4. Conduct Thorough Due Diligence Related to ESG Activities
Perform careful due diligence on third parties, including suppliers, contractors, and joint venture partners. This should include assessing their compliance history, ESG initiatives, and applicable governance frameworks.
5. Leverage Technology for Compliance Management
Utilize advanced compliance management platforms that offer centralized data management, automated workflows, and powerful reporting capabilities. These tools can help mining companies stay ahead of regulatory changes related to risks, as well as evolving program requirements.
6. Engage with Stakeholders
Proactively engage with local communities, regulators, and other stakeholders to build trust and maintain a social license to operate. Transparent communication about compliance efforts, environmental initiatives, and social concerns can help mitigate reputational risks.
7. Stay Informed of Regulatory Changes
As seen, mining faces an extremely complex regulatory environment when it comes to risk areas. Keep abreast of evolving regulations and industry standards. Participate in industry associations and forums to stay informed of best practices and upcoming regulatory changes.
8. Implement Sustainable Practices
Integrate sustainable practices into mining operations to address environmental concerns and meet ESG expectations. This includes investing in renewable energy, implementing water conservation measures, and developing comprehensive mine closure plans.
GAN Integrity for Mineral and Mining Companies
Our minerals & mining compliance software helps companies navigate these challenges with a comprehensive, easy-to-use compliance platform that organizes requirements, automates workflows, and provides powerful reporting, making it easier for you to do your good work. With GAN Integrity, compliance teams can see everything, adapt to anything, and get all the help they need.
Want to learn more? Read how Barrick Gold, one of the world’s leading mining companies, uses GAN Integrity to continuously maintain the highest standard of business integrity globally.
Hannah Tichansky is the Content and Social Media Manager at GAN Integrity. Hannah holds over 13 years of writing and marketing experience, with 8 years of specialization in the risk management, supply chain, and ESG industries. Hannah holds an MA from Monmouth University and a Certificate in Product Marketing from Cornell University.