Journey Towards Sustainability: The Case of the Newmont Ahafo Development Foundation

Presented in New York – USA – March 2010 By Nick Cotts & Joseph Danso

Overview

 Commitment to Sustainable Community Development  Ahafo Social Responsibility Forum  Community Agreements  Newmont Ahafo Development Foundation (NADeF)  Vision and Mission  Governance structure      Funding Allocation of Funds/Development Focus Articulation/Alignment Foundation’s Activities Challenges  NADeF Linkages to Newmont, COM DEV and Local Government 2

Newmont’s Commitment to Sustainable Community Development

 Create value with a wider set of stakeholders through the alignment and linkage of our business and our social responsibilities  Balance economic considerations with social/environmental consequences to understand how our actions today may affect future generations  Fundamental understanding that community acceptance is paramount to a sustainable business model  Seek to maximize training, employment and business opportunities using fair and transparent processes that provide the opportunity for local communities to articulate their needs and aspirations  Maximize opportunities to leverage community development projects and empower other sectors through partnerships are sought out and encouraged 3

Ahafo Social Responsibility Forum

 Community/Company initiative: Multi-stakeholder group of 55 members; independent moderator and co-moderator  Traditional Leaders, Youth, Women’s Groups, Regional Gov’t, Local Gov’t, Local NGOs, Farmer Groups, Newmont  Forum for discussion and decision-making between stakeholders on issues related to community development and the business  Forum met over 20 times during a 2 year period  Standing Committee Purpose/Function 4

Ahafo Social Responsibility Agreements

Three agreements encompassing ten communities in the Ahafo mine area: Relationship Agreement:

roles and responsibilities on how the Company and Community will engage

Employment Agreement:

guidelines in the hiring of local workforce

Foundation Agreement:

Foundation

(NADeF)

Creation of the Newmont Ahafo Development as a structure to fund and support sustainable community development programs 5

Newmont Ahafo Development Foundation

(NADeF)

Vision:

To achieve community prosperity and self-reliance .

Mission:

Our mission is to empower communities through grants, knowledge-sharing, partnership and capacity building to achieve sustainable development.

Stakeholders Vision for NADeF:

Our vision for NADeF is to be a recognized and trusted development partner in the Ahafo Communities.

 NADeF is registered under laws of Ghana.

 NADeF Agreement signed between Newmont and Ahafo Mine Communities in May 2008.

 NADeF Secretariat established with offices located in one of the Mine Communities 6

Governance Structure

Board of Trustees

 Nine-member Board (4-Comapany and 4-Community + Chairperson) established by the Agreement to manage and control the funds of the Foundation  After 6 years additional community members will be appointed, including Chairperson

Secretariat

 Established with 4 main employees (Exec Sec, Project Coordinator, Fin Controller, Admin Assist) and 4 supporting staff (1 driver, 1 housekeeper and 2 security guards)  Administer day-to-day activities 7

Governance Structure (cont)

Tender Board

 Nine-member Board (2-Traditional Leaders, 2-Local Government Reps, 2-Youth Reps, 2-Newmont Reps and 1 member appointed by BOT as Chairman)  Responsible for any tendering process in accordance with the Ghana Procurement Act

Sustainable Development Committees (SDC)

 Seven-member community-based committees in each of the ten communities (1-Youth Rep, 1-Women Rep, 1-Unit Committee Rep, 2-Trad Leaders Reps, 1 Assembly person and 1 community member nominated by the Traditional Leaders)  Responsible for planning development projects at the community level and submission of community proposals to the Secretariat through the District Assembly 8

Foundation Funding

 Foundation is supported by $1 per oz &1% net profit from Ahafo Operation (about $4.7 Mn YE 2009)  Model is to partner with external donors locally, nationally and internationally  Endowment provision funded via the annual contribution (10% - first 5yrs; 15% - second 5yrs; 20% - third 5yrs; and 25% - fourth 5yrs).  Partnership funding and leveraging resources is opportunities are being evaluated 9

Allocation of Fund/Focus Areas

 Social Responsibility Forum established allocation system aligned with self determined development  Ongoing projects in the communities include: Construction of Teachers’ Quarters, Construction of Library, Drilling and mechanization of water bores, Construction of classroom blocks etc.

 Funds are allocated to communities based on set criteria using impact, population, land size in mining lease area, commitment etc.

Development Area

Human Resource Development Infrastructure Development Social Amenities Economic Empowerment Natural Resource Protection Cultural Heritage and Sports

Allocation (%)

24 23 18 17 12 6 10

Articulation/Alignment with Development Partners

 SDCs liaise with the District Assembly in the identification of community projects  Final approval of community proposals to the Foundation is done by the District Assembly – to ensure projects are aligned to the District Development Plan  Technical supervision of all projects are done by the District Assembly engineers  Completed projects and programs are handed over to relevant government agency and the community  Ahafo Com Dev is coordinating the setting up of the Foundation Secretariat and capacity building for the SDCs  Ahafo Com Dev discussing possibility of existing projects that could be aligned to the Foundation agenda and possible implementation by Foundation 11

Journey Towards Sustainability

 Projects supported under NADeF are aligned to the District Government’s Development Plan  Broader community participation in the planning, decision making and the implementation process creates sense of ownership  Governance structure separate from the company – individuals serving on committee as equal partners  Possibility of supporting projects with community resources – land, labour etc.

 Infrastructure projects handed over include operations and maintenance plan  Endowment supports future of the Foundation after mine closure  Leveraging resources through partnership approach 12

Foundation’s Activities

List and Photos of key activities / some NADeF projects

SDC Training Workshop SDC Refresher Training Mechanized water @ Ntotoroso Teachers Quarters @ Gyedu Classroom Block @ Wamahinso WC Toilet @ Ntotoroso

13

Our Challenges

 Dependency: Newmont Ahafo cannot meet everyone’s needs!

 Continuous pressure to “act” as the local government  Building a long-term vision with local communities and government  Secretariat capacity, network and partnerships  Alignment/agreement of priorities vs. resource availability  Capacity of community to engage with Foundation and provide timely feedback  Managing expectations of stakeholders on community development issues  Defining sustainability and creating a shared vision 14