Manuel Ortiz Monasterio
Director General
ERM México
View from the Top

Impact of Sustainability Consulting

Sun, 10/20/2013 - 12:36

Q: Why should companies invest in sustainable practices, and what are the benefits and return on investment that result from hiring an environmental consultancy firm?

A: Hiring an environmental consultancy firm is all about managing risk, and it should be seen as an investment rather than an expense. Companies may end up paying less by not implementing sustainable practices, however they will eventually face greater environmental, health and safety problems, meaning that they have to invest more money in the future. ERM’s services bring several benefits for our customers, such as access to social licenses, a reduction in fines, lower accident rates, and lower insurance premiums, or social security premiums in the case of Mexico. Though the value of reputation is not easy to quantify it certainly matters, and our practices help companies to improve their image and position themselves in a more positive light. We work towards the ideal of being proactive and preventing social conflicts before they arise. However, in cases where problems do arise ERM offers services and methodologies to address such problems. We work in a conceptual way, with a social matrix that integrates different variables, and depending on the stage of the project we provide different considerations that can help to minimize social conflicts. When a company is still in a position to be proactive we work on creating a good impression from the very beginning, at the exploration phase. When the project has been deemed viable we design options based on different social criteria, analyzing the potential social, economic or reputational impacts of each decision.

Q: How does your approach to solving social and environmental matters differ from that of other firms?

A: ERM does not approach these matters from a public relations or a legal liability perspective, but from an international best practice standpoint. Companies are forced to stay in an area for as long as there are resources to be explored and profited from, and are therefore interested in building good relationships with local communities. This requires a strong sensitivity for understanding human needs and aspirations, as well as for understanding how the activities of a large mining company will impact those aspirations, create expectations, revise the historic memory of development, or impact legacy issues. At ERM, we try to understand the behavior of this complex mixture of components in a dynamic setting, and we design the right social management tools and strategies, not just in terms of social impacts or risks, but also in terms of community perceptions and human development needs. Our approach is aligned with international standards, and it calls for building strong human relationships, based on codependence as opposed to dependence, meaning that the community can benefit from an improved quality of life, and the company can obtain the social license it needs to operate.

Q: What is the typical profile of the companies that ERM is working with?

A: We are working with industry leaders and guiding them towards establishing successful sustainability practices. We feel that that there is more risk in associating ourselves with companies that have the mentality of cutting corners than with companies that are deeply invested in the topic. Nonetheless, we provide customized solutions for specific problems, and try to work out the best business savvy ideas to help companies become 100% successful in their sustainability solutions, regardless of the stage the business is at. The majority of projects have to deal with complex legacy issues, which are related to social expectations. We conduct environmental and social due diligence to facilitate mining investment. It is always better to be involved in a project from the beginning, but it is never too late to start doing things the right way.

Q: How does ERM work with its clients to optimize safety performance?

A: In modern mining, the clients with whom we work are more sustainability conscious, and companies know that if they do not address safety performance issues or social conflicts adequately their projects will not be viable. The Mexican mining industry is progressing in its application of safety standards, but authorities that are trying to monitor mining activities are facing challenges when it comes to accessing the sites, as well as other security-related issues.

Q: Which countries set the best example for Mexico, and what measures that have not yet been implemented here would you like to see implemented in the future?

A: From my experience on projects in Colombia, Peru, Chile, Panama, Guatemala, the Dominican Republic, Mexico, and Argentina as ERM’s Social Practice for Hispanic America Coordinator, I consider it crucial to emphasize the importance of community agreements. Particularly in Chile and Peru, more strategic tools and mechanisms have been developed; for example, their permitting processes include an actual assessment of social impact.

Q: What do you think are the key factors that have contributed to making the Cerrajon Project in La Jualira, Colombia successful?

A: Cerrajon is the largest open pit coal mine in the world. At this project we have built excellent community relations, combining health and safety with social matters. Coal was transported from the mine to the port via a railway line that crossed areas that were heavily populated by indigenous groups; it truncated traditional travel routes, and separated communities from their traditional water sources. There were a number of fatal accidents on the railways involving indigenous community members. Our Investigations determined those deaths to be suicides, caused by a complex social phenomenon that had to do with cultural marginalization, alcoholism, unemployment, and several other social variables. We provided our client with an integrated method to deal with health, safety and social issues, which resulted in a successful reduction of that suicide trend.

Q: Given the current growth in the mining industry, what would you like ERM’s position in this industry to be in three years?

A: There are some Mexican companies that offer the same services as ERM, but we offer the advantage of having a worldwide network of resources and international experience. Mexican companies could improve over time and learn to do things the way we do, however ERM is currently ahead of the other companies that provide services in this area. Our broad set of services allows companies to see the implementation of sustainable practices as an investment and not only an expense. ERM has grown significantly since it started its Mexican operations, and its size is likely to double given Mexico’s very promising future.