Transcript About Control Risks - Mining Metallurgy and Exploration

How to Prepare and Manage Crisis
Tuesday, 30 April| 2:20 PM-3:10 PM
Rebecca Scorzato, Practice Leader -Crisis Management Consulting
Control Risks, Washington DC
About Control Risks
Control Risks is the leading international business risk consultancy. Through our network of
international offices and expertise, we enable clients to successfully invest in complex environments
around the world.
Why Invest in Crisis Preparedness?
Why invest in Crisis Preparedness?
Management
recognition of
need for
preparedness
• Crisis events are
inevitable
• Mining is inherently
risky
Stakeholder
expectation of
preparation
• Market – financial
imperative
• Employees
• Communities
Pre-event
planning is
critical prior to
crisis
• Reduce impact of
event
• Anticipate risk
More Companies Are Reporting CM Efforts Externally
Control Risks research has found that Fortune 100 companies increasingly
use annual reports to champion their CM/BC efforts
• From 2009 to 2011 the number of Fortune 100 companies that discussed crisis
management and/or business continuity in their annual reports increased each
year, to 25 in 2011
Countries Discussing BC/CM in
• Response to events:
Annual Reports
• Japan earthquake
• Deepwater Horizon
• Strikes and community
relations
• Response to stakeholders:
• Larger trend acknowledging
that companies must
disclose more information
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The Changing Calculus of Disclosure
Events over the past few years have demonstrated that crisis management
programs are not just a luxury achieved at extra cost
Past
• Organizations undertook crisis management reactively as
a response to incidents that may have grave operational,
reputational, or other implications
• Organizations are increasingly adopting a proactive
posture regarding crisis management and more are
Present communicating this to external stakeholders
• Organizations will proactively pursue crisis management
programs and disclosure about them externally to
Future
convey accountability
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Example
GoldCorp announces
“Safe enough for our families” incentive in 2012 Annual
Report
At Goldcorp, safety is absolutely fundamental to what we do and
we are justifiably proud of our track record: 2012 was the fifth
consecutive year of better all-injury performance. However,
statistics cannot make up for the reality that there were two
fatalities at Goldcorp operations this year. To all of us, this is
simply unacceptable. Our safety focus for this year and the future,
across the Company, is to work on our training and safety culture
such that we see no fatalities at Goldcorp. While we will, of
course, maintain an emphasis on reducing all injuries, we are also
rolling out programs designed to fight fatalities with renewed vigor.
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Mining - Lack of planning translates into operational
impact
Crisis event halts
operations
Loss of
$$$
Inadequate
program to
reduce impact
(Crisis
Response)
Not just financial- Duty of Care
• Consider the organization’s responsibility in dealing with a crisis
• How will actions be viewed by others?
• By the families of any victims?
• In a court of law?
• In the court of public opinion?
• Can you demonstrate that you were prepared, had a response
apparatus in place, and sought out assistance from appropriate outside
resources?
• Can you demonstrate that you acted in a reasonable and professional
manner throughout the ordeal?
How can Crisis Management help?
Crisis management can
• Satisfy regulatory drivers
• Due diligence/duty of care, SOX, Corruption Prevention
(FCPA & UK Bribery Act)
• Save lives, reduce injury
• Increase shareholder value and investor confidence
• Protect company officers, senior management and directors from
legal action from questionable due diligence
• Grant a degree of peace of mind to employees
• Limit reputational damage
How should the mining industry build
Crisis Management Programs?
All hazards planning focused in impact reduction
• PEOPLE
• ENVIRONMENT
• ASSETS
• REPUTATION
* Scenario based Contingency planning based on acute risks
Integrated Corporate Crisis Management Program
Corporate
Crisis
Management
Team
Isolate from day to day
business
Manage at source
Regional Crisis
Management
Teams
Site level Crisis
Management
Teams
Escalate according to
predefined criteria
Clear roles and
responsibilities
Your Crisis Management Program
• The key is to realize that a proactive
approach to crisis management (and
business continuity) is the only
sustainable way forward
Crisis Management Program Cycle
Develop
• This means not just developing programs
before a crisis occurs, but also:
• Exercising your program
• Reassessing your program
Reassess
Implement
• Your plan is always a work in progress;
externally communicating your efforts to
key stakeholders will:
• Increase accountability and
therefore program effectiveness
Exercise
• Ensure that expectations are aligned
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How do I anticipate risk to feed into Crisis
Management Program?
Continuous risk identification through a structured
process
Leadership
interviews
Surveys
Financial
instability
Staff
retention
and Labor
relations
Functional
managers
Events
Equipmen
t Failure
Natural
disasters
Communi
ty
relations
Enterprise Risk
Management
Program
Questions?
[email protected]
www.controlrisks.com