June/July 2010

Farallon joins the neighbourhood

By D. Zlotnikov

It is the weekend and you have been looking forward to some relaxing gardening. The eggplants should be just about ripe. With a smile you grab the work gloves and head out back.

The sight that greets you is anything but relaxing. Ragged pits and mounds of dirt have replaced orderly rows of lettuce. The tomato plants’ roots are dug up and shredded. Horrified, you turn to your eggplants to find the culprit — the neighbours’ dog — excitedly tunnelling its way into the soft dirt under them.

The dog’s owners, who only recently moved into their newly built home across the street, are understanding and apologetic. The wife offers you a cold drink while the husband pulls out a cheque book. “How much?” he asks.

Now, suppose the conversation goes differently. The owners are still apologetic but no one reaches for a cheque book. Instead, they offer to help fix what can be fixed and half an hour later are both in your back yard, spade and shovel in hand. The next morning there is a pickup truck parked outside and a pair of workers are closing up any dog-sized gaps they find.

A clear vision

When Dick Whittington, president and CEO of the mid-tier mining operator Farallon Mining, talks about his mine being a good neighbour to the local communities, he is very clear about which of the two examples above he has in mind. “We need to be good neighbours,” he says. “Everything we do, we do just as if you moved into a new neighbourhood. We want to truly be an integrated part of the community.” Simply writing a cheque just won’t cut it.

Farallon has been been working hard to be a good neighbour in the area near its G-9 Mine in Mexico’s southwestern Guerrero state. In addition a number of local initiatives the company has launched, Whittington has embraced corporate social responsibility (CSR) as an underlying principle to guide day-to-day decision-making.

“The sustainable development definition we developed really starts with me,” he says. “It starts with a commitment from the top and manifests itself in different ways through the organization. Before you start writing stuff on paper, it has to come from within yourself, within the people in the company. They really have to live CSR or it’s just another mantra, another placard on the wall that everyone’s supposed to follow, but once it’s up on the wall, everyone just gets on with their job.”

A working relationship

To attain the level of acceptance and awareness Whittington describes, Farallon’s employment contracts start not with production goals, efficiency improvements or safety guidelines but with a requirement that all employees — from senior management to the underground drillers - be respectful, responsible members of the community.

The importance of CSR is embedded in Farallon’s corporate structure. “There are two people who can shut this mine down,” says Whittington, “the general manager of operations and the general manager of socioeconomics. If the general manager of socioeconomics says, ‘You guys are screwing it up, we’re not doing things right, and we’re going to have to shut this mine down,’ then we’re going to shut it down. Now, he’s not going to do it irresponsibly, but what it tells everybody in the organization is that you have to listen to the socioeconomic people. You cannot ignore them.”

The general manager of socioeconomics reports directly to the CEO and not to the general manager of the mine.”That means he has access to me on any issues, at all times, and he cannot be shouted down or ignored by the production machine,” says Whittington.

Whittington also recognized that the production team and the socioeconomic team needed radically different skill sets. “The production machine is impatient,” he says. “It’s demanding. It’s a heartbeat throbbing away at 160 beats per minute.” For the socioeconomic team, he was looking for a different skill set. “You want empathy. You want people who are going to listen more than they’re going to talk. You want people with immense patience - people who can listen to someone complaining about their dog getting run over and yet fully understand that this person isn’t talking about their dog being run over — they’re talking about respect and the relationship with the community.”

Farallon’s socioeconomic team doesn’t wait for the local residents to come to the mine with complaints. Instead, the team is on the road every day, listening to local issues and bringing them before the company leadership. “You can’t run a mine without being in the stopes every day, and you can’t run a socio-economic program without being in the communities every day,” Whittington explains.

Setting down roots

In addition to the work of its socioeconomic team, the company has helped fund an adult literacy program that serves 22 local communities. Since the program began in 2006, it has seen 40 students graduate.

A 1,000-tree nursery is in place and the company plans to expand it to 100,000 trees to be replanted back into the surrounding area. Some of the trees currently being grown were on the verge of extinction and were saved, thanks to the nursery.

The 100,000 trees are just one of the long-term benefits Whittington hopes the mine will bring to the region. Currently, the mine employs 400 workers directly and approximately 1,400 more indirectly; many of the latter are skilled tradespeople.

“If you look at an area where a mine started up, the process requires you to develop skilled workers: electricians, carpenters, mechanics,” says Whittington. “All of these people can move to a different local job or start up their own business to sell products or services to a different end user than the mine. That, ultimately, is the goal.”

For Farallon’s CSR initiatives, Whittington emphasizes the importance of not simply handing down solutions – not being Santa Claus, as he puts it – but of creating the capacity for local communities to address their own problems over the longer term. For instance, when one local community wanted to connect itself to the national grid, Farallon could easily have shouldered the $160,000 cost of the project. But the community’s problem was not a lack of funds, Whittington says. The Mexican federal government offered grants for this type of project but the local administrators were daunted by the 100-page application forms. Farallon offered its assistance with the paperwork and the community retained all ownership of the project. The result was a successful grant application and the power line is now in the final stages of being installed.

Farallon’s success at G-9 stems from not just addressing community concerns but doing so in a manner that creates future capacity, says Whittington. 

“It’s an intellectual undertaking as well as a lot of hard work,” he says. “You can’t change the whole world, but hopefully you can change one corner of it if you integrate yourselves effectively into the culture without in any way imposing yourselves onto that culture. That’s the big challenge.

www.farallonmining.com

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