sustainability managament of supply chains – case … · sustainability managament of supply...

3

Click here to load reader

Upload: doannhu

Post on 11-Jun-2018

213 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Sustainability Managament of Supply Chains – Case … · Sustainability Managament of Supply Chains ... This case study can be considered a Life Cycle ... the failure. In this case

Sustainability Managament of Supply Chains – Case

Study of a Peruvian Mining Company

*Sonia Valdivia1, Richard Azabache

2, Alicia Polo y La Borda

3

1Pontificia Universidad Católica del Perú- Paris - [email protected], Sección de Ingeniería Industrial, Av.

Universitaria Cuadra 18 s/n, San Miguel, Lima - Perú 2Compañía de Minas Buenaventura S.A.A. – Perú - [email protected]

3University of Dundee – Scotland [email protected]

Inversiones Mineras del Sur S.A. (INMINSUR) exploits gold from its mine Antapite, located in the poorest region of Peru and providing work to more than 1,200 people (85.2% from supplier companies). Antapite has a certified environmental management acc. to ISO 14001, which has extended its application to also cover health and security aspects. The scope of this Environmental Management System (EMS) has expanded to cover 10 Antapite’s suppliers since 2005, which are Peruvian small and medium size companies. This case study can be considered a Life Cycle Approach since the company incorporated activities that are out of the legal scope of the company and that are relevant regarding environmental and social impacts such as the exploration, transportation, cleaning and restaurant services of the workers. This paper presents most relevant results from this case study and lessons learned regarding key aspects for the success of the process.

Introduction

Inversiones Mineras del Sur S.A. (INMINSUR) is one of Compañia de Minas Buenaventura S.A.A.’s ten subsidiaries [1]. The later is a Peruvian mining company that ranks among the top 10 gold producers worldwide. INMINSUR extracts gold from its mine called Antapite, located in the southern Andes of Peru, in the Department of Huancavelica (the poorest department of Peru with 95.4% of its population under the “poverty line1” according to the 1993 census). Antapite provides work to more than 1,200 people; where 85.2% of them come from 10 supplier companies. The implementation and expansion of the

Environmental Management System

Antapite has a certified environmental management acc. to ISO 14001, which has extended its application to also cover health and security aspects. The scope of this Environmental Management System (EMS) has expanded to also cover Antapite’s suppliers since 2005. Suppliers provide services previous to the extraction phase: underground exploration, development, (diamantine) perforation, blowing-up, preparation and extraction of minerals, construction of mining working areas, installation of pipes and rails, food, laundry, and cleaning services and the construction of metal structures and furniture (see Figure 1).

1 Poverty line is defined by population who can not afford the minimum consumption basket (US$54 per month per capita).

Antapite has supported the implementation of EMSs by its 10 suppliers aiming at the achievement of the certification of their operations. Also, Antapite has a “supplier assessment policy”, which requires compliance with at least the following criteria: Compliance with the law, attention to health and security aspects of employees or sub-contractors, positive impacts on the neighborhood, and minimum pollution of water courses. The extended EMS can be understood as a life cycle approach2 since it incorporated and supported activities that are out of the legal scope of the company and that are relevant regarding environmental and social impacts such as the exploration, transportation, cleaning and restaurant services of the workers. The extended EMS at Antapite and suppliers is reviewed twice a year by means of one external audit and at least one internal audit what ensures detection on time of the risks of deviations and real deviations.

2 Life cycle approaches includes a range of life cycle methodology from quantitative to qualitative procedures and includes life cycle thinking and life cycle management approaches.

Page 2: Sustainability Managament of Supply Chains – Case … · Sustainability Managament of Supply Chains ... This case study can be considered a Life Cycle ... the failure. In this case

Results from reviews and audits of the extended EMSs of Antapite (indeed of INMINSUR) and its suppliers, are statements of conformity or non conformity with the system. If “non conformities” were detected, an immediate reaction to, first, control the impacts and, second, to establish measures to prevent future deviations are required and introduced. Serious or “major non conformities” would result when severe impacts have been identified regarding security, health or environmental aspects. That would imply that the system should be stopped and reformulated to correct the failure. In this case either INMINSUR or the supplier can have its certification acc. to ISO 14001 revoked. Results and lessons learned

After the implementation of an extended EMS in Antapite (INMINSUR) and its 10 suppliers, the following results along the Life Cycle were evidenced: - less utilization and consumption of: explosives

(then less air and dust emissions), water, and consumption and fuel for the workers transportation (then less air emissions and waiting times)

- less generation of construction wastes (e.g. rests of cement)

- non use of toxics in the exploration phase. - controlled disposal of sludge from exploration

processes - less number of accidents in the mine site (from 17

in 2004 to 15 in 2005) ([2]

Lessons learned regarding key aspects for the success of the process are described as follows: - Effective and efficient communication channels

are crucial to articulate a common language and understanding of the environmental, health and security policy as well as goals and indicators to track results achieved. The communication aspects are especially important considering than mining workers usually come from different cultural backgrounds and many of them do not consider Spanish as their mother tongue, then to achieve a common perspective requires an additional effort implying training and educational programs.

- Antapite’s support with training and educational programs to suppliers was decisive to achieve success of the extended EMS.

- Lack of clear acknowledgement when achieving milestones discourage suppliers to keep working. A clearer communication of the acknowledgements of progress was needed

- Suppliers implemented relative simple extended EMS considering an environmental policy aligned

to the one of Antapite (INMINSUR) plus 3 to 5 significative aspects (1 to 2 health and security related aspects and 2 to 3, to environmental related aspects). In fact, since suppliers’ operations are related, many aspects were alike. That enabled suppliers to progress at the same pace by sharing expertise and consulting services. Therefore, costs were reduced.

- Periodical reviews facilitate an update on the system and, furthermore, a continuous improvement.

Conclusions

The implementation of Life Cycle Approaches at INMINSUR and its 10 suppliers was possible which can be explained by two main facts: - The commitment of the leader company

(INMINSUR) to support the suppliers - The commitment of the managers of the suppliers

to implement a management system - The positive economic perspectives for the mining

sector in Peru and therefore for INMINSUR. This results in reduced risks for middle and long term investments (e.g. in training programs and management systems).

The multiplier effect could be perceived. There are a couple of reasons for this multiplier effect: a) The companies are located in a poor region and any decision regarding the building of road infrastructure, the location of the dormitories of the workers, the kind of water and energy supply, the location of the disposal sites, etc. are relevant for the neighbor towns; and b) Most of Antapite’s suppliers also operate in other mining units and for other mining companies so they can transfer this environmental and social concerns to other Peruvian stakeholders.

References

[1] Compañía de Minas Buenaventura

(http://www.buenaventura.com.pe/)

[2] Ministry of Mining and Energy of Peru

(www.minem.gob.pe)

Page 3: Sustainability Managament of Supply Chains – Case … · Sustainability Managament of Supply Chains ... This case study can be considered a Life Cycle ... the failure. In this case

Figure 1- Activities of Antapite and its supply chain

Figure 2 - Scope of activities of Compañía de Minas Buenaventura S.A.A. [1]

Civil works Exploration DrillingTransportation Blasting Extraction ConcentrationDisposal of

wastes

Tailings

Perforation

Suppliers INMINSUR

Civil works Exploration DrillingTransportation Blasting Extraction ConcentrationDisposal of

wastes

Tailings

Perforation

Suppliers INMINSUR