CYANIDE CODE

CYANIDE CODE STEERING COMMITTEE

Minutes of the second meeting, March 1-2, 2001, held in Napa Valley, CA

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All members of the Steering Committee were present. Lars-Ake Lindahl attended as an observer for Euromines, to assist with information flow about the initiative to the European mining industry.

The Chairman commenced the meeting by calling for each Steering Committee member to spend a few minutes saying what he expected the Code to achieve. Also his expectations for the outcomes of this meeting.

The expectations for the meeting were summarised to form the Agenda for the meeting as follows:

1. Agree on Scope of Code,
Develop Mission Statement

2. Define Basic Form of Code,
Generic principles versus specific standards

3. Review First Draft of the Code
(Circulated ahead of meeting by Code Manager)

4. Identify Future Action Items for the Committee and its members.

Agenda Item 1
Agree on Scope of Code
The members' views as to the objectives and application of the Code were consolidated and a Mission Statement for the overall Code Development Project was drafted.

Code Development Project Mission
To assist the global mining industry to continuously improve its cyanide management, thereby minimising risks to people and the environment from the use of cyanide in mining, and reducing community concerns about its use.

Objectives and Application of the Code

Some of these dimensions were readily agreed. Three issues were identified on which views would potentially diverge, and break-out groups were formed to discuss these issues in more depth. The three issues were

The Breakout groups made progress towards a common view in these areas and their reports back to the Committee are summarised as follows (these views do not necessarily reflect the views of the Committee as a whole at this point):

Application of the Code to existing operations
The view was that the general approach should be not to differentiate the standards to be met for Code signatories. Existing operations would not get Code "certification" unless they are in full compliance with the Code.

How difficult it will be for existing operations to comply with the Code will not be clear until the details of the Code are worked out. It may be impossible to apply some specific standards in some existing operations if they have not been designed that way. In other operations, changes could be made to meet the Code's requirements.

It was agreed that only mine sites in full compliance with the Code should be able to claim use of the Code "badge" and that rules would have to be formulated for its use. For instance, the badge should attach to individual operations which are in compliance, and only to the parent company if all of its sites are in compliance.

There would be an interim phase between a company signing onto the Code, doing those things required to come into compliance with it, and being audited to have its compliance certified. There would need to be some recognition for companies as signatories up to a specified period, but they should not be allowed to claim full Code status until certification has occurred. It may be appropriate in this interim period for companies to be required to identify a pathway towards compliance, with timing and milestones.

The approach to auditing and verification
Two levels of reporting were identified which would occur as part of a company's normal systems rather than against the Code per se. These were

For management purposes, Code signatories would need to add Code specific elements to both of these regular reporting systems.

Two additional levels of auditing/reporting would be added by the Code.

Code Compliance Audit
Necessary features were that the Code audit process had to be credible (both process and people) and transparent. In line with this there should be an audit protocol developed along with the Code, auditors should be accredited and results should be reported.

On auditor accreditation, one model discussed was to spin off a not-for-profit company to be the Code Auditing body. This model had worked well in Canada where government had out-sourced some of its monitoring and review functions to not-for-profit specialist organisations. The auditing company would be expected to provide cost effective services on a global basis, and would have auditors in different parts of the world. It should not involve sending in an expensive team of auditors with prohibitive costs being borne by companies.

Alternatively, an auditor accreditation process could be set up to accredit auditors, who could be people in companies, consulting firms, government officials, or individuals.
In both cases, the Code Repository would play a role, either to catalyse and approve the not-for-profit company or to set up the auditor accreditation process.

Other features of an ideal audit system were raised, such as the need for an appeals process on audit findings, both by the company and by third parties (with checks and balances) and the desirability of including suitably trained community or NGO groups on an audit.

Frequency of audits were not agreed, with options being annual, annual for the first couple of years and less frequent thereafter, or once every three years, with self-assessments in between. There also needed to be some reporting of progress made in implementing audit recommendations.

In general, there were concerns that to impose a heavy auditing burden whether in terms of quantity of work or cost would drive smaller and developing country companies away from the Code. If the Code is to attract them it must assist and encourage them to improve their management, not impose untenable burdens. Providing an audit protocol could be of assistance. The issue of small company uptake is critical and further consideration of approaches to auditing and reporting must pass this test. The rigour of the process and the cost of the process both have to be considerations.

Further work was requested to develop options for the certifying models. The Forest Stewardship Council process and the European Accreditation Council (and other possible regional accreditation initiatives) should be reviewed. Also, information is to be gathered on costs for audits of different kinds.

Industry Code Reports
The Code Repository should report on the overall performance of the Code e.g. roll of signatories, and also collation (rather than aggregation) of high level audit findings of signatories.

Agenda Item 2.
Define basic form of the Code

Principles Versus Standards
The Breakout Group's view was that the Code should cover both. Also that:

The underlying rationale for these numbers needed to be described, e.g. in terms of dose/response curve, jurisdictions which use them, anecdotal evidence from sites, etc.

It was noted that the 50 PPM discharge to tailings dam limit will increasingly be a stretch target, as more deposits are developed with copper in them which requires higher levels of cyanide to be used.

The point was also made that including precautionary numbers in the Code could help some of the smaller operations for whom requiring the alternative of detailed site-specific risk assessments and water balances can be very expensive.

Style/Form of Code
In general discussion about the form of the Code, most Steering Committee members felt that a detailed document (possibly of 50 pages in length) would be of assistance

For this purpose, the "cradle-to-grave" approach was suitable, i.e. stepping through phases from transport, handling, storage, site operational issues, discharge, to decommissioning.

Also that there needed to be a hierarchy or set of documents to complement each other and for different audiences e.g. CEOs, external, non-site-based users, etc. Proposals included;

In the case of a high level Code, the details of the operational standards would still be included as assistance, as would an audit protocol against those standards. Plus appendices and further reference sources would be part of the compendium.

As a reality check in developing the Code it was agreed that there needs to be analysis of whether the Code would have made a difference to known past problems.

Coverage
There was general agreement at previous meetings as well as at this meeting that the Code should cover sound management of cyanide specifically, rather than sound management per se.

However, it was clear in discussion that the distinction is not always easy to make. For instance, truck maintenance is a general issue, but has also been implicated in cyanide accidents. Similarly, water balances are clearly a critical issue in general but are also a critical element in cyanide management. The point was made that water balances are a normal requirement in operating licences and that this Code should specify only those extra or different things to be done with respect to cyanide.

The sharpest discussion concerned the appropriate coverage of tailings management practices and standards in the Code. From the outset it has been recognised that this Code could not and should not replace or duplicate other codes if they adequately cover the issue but that other codes or guidelines should be referenced. There are existing tailings codes and a range of initiatives are also in train to strengthen them. Furthermore, the point was made that if work is to be undertaken to improve tailings codes this would need to involve the mining industry broadly, rather than the gold industry only. Nevertheless, a number of Committee members had difficulty with the total exclusion of tailings management from the Code. The point was made that there needed to be further discussion of those specific aspects of tailings management which may warrant special attention or specific practices because of the presence of cyanide in the tailings. This dilemna was unresolved at this meeting. Work was requested to review existing tailings codes plus initiatives underway to develop new or strengthened tailings codes.

Agenda Item 3.
Review First Draft of the Code

Norm Greenwald took the Committee through a first rough draft of the Code, which had been requested by the Committee to draw comment and reaction at this meeting. Recognising that this had put Norm under considerable time pressure so soon after starting in the job, the Committee was highly congratulatory of the work put before it.

The document uses the "cradle-to-grave" approach and covers all elements to be addressed by site managers to ensure sound cyanide management.

Comments were made by individual Steering Committee members on some specific elements at the meeting. Committee members agreed to send their more detailed comments to Norm within a week.

Comments included:

Code Coverage/ Scope/ Aims (revisited)
The Chairman then canvassed the Committee again for specific views on what the Code should cover and what it should achieve and asked members to consider whether the document being developed would deliver the outcomes sought.

Comments included:

Process For Stakeholder Engagement

Committee members were asked to outline what they had done and will do in the area of stakeholder engagement to ensure that views of the various constituencies are understood.

A range of valuable specific suggestions were made of meetings, bodies and opportunities for a two way dialogue on the content of the Code over the next few months. The Chairman asked Committee Members to give further thought to stakeholder engagement opportunities and processes and to e-mail Harold Barnes with their considered ideas.

The consultation program would need to be consolidated and reviewed for gaps.

Collective Steering Committee Consultations
The Committee will also have a collective role in consultation as the Code develops. It was agreed to hold consultative meetings (2-3-hours) at the time of Steering Committee meetings. Invitations to be issued to various stakeholders to meet with the Committee to give thoughts, comments and air concerns about the draft Code. In Washington, NGO, and financial institutions would be the focus (include Interamerican Development Bank). Vancouver would provide the opportunity to involve junior companies, Chamber of Mines, MiningWatch, etc. People should be invited to make a presentation to the Committee as well as providing for a less formal exchange of views.
Committee members to send suggestions for invitees to Harold.

Availability of Draft Code
It was agreed that this first outline of the Draft Code should not be available publicly since changes would be made to it as a result of discussion at this meeting, as well as to reflect further comments from Steering Committee members to be sent to Norm as soon as possible after the meeting (target timing - 7 days). Steering Committee members should comment on conceptual issues and gaps as well as on the specifics of the first draft. The next draft should be the first to be distributed outside the Steering Committee. The Industry Advisory Group is keen to receive this as soon as possible.

Committee members also to provide Norm with contact lists, e-mail addresses, web-sites, etc. for distribution of the draft.

Roll-Out of Code
Once agreed, there needs to be a process of "selling" the Code internationally. Paul Bateman and the Industry Advisory Group will seek professional advice and develop proposals. A multi-track process would be needed with different methodologies to reach different audiences, the industry, governments, NGOs, local company operators, local communities - using the media, web-sites, conferences, advising companies on how to communicate about it with their constituencies, reaching different geographic locations, etc

It was agreed that this process should be a joint exercise by the Committee, (anticipating that all of the members will be satisfied with the Code outcome).

The will be a need for a credible spokesperson. Translation of the Code would be required, notably into Spanish.

It was noted that there might be an earlier communication exercise - mid-term, which would also help with the stake-holder engagement on the content of the Code.

Agenda Item 4.
Future Action Items

Tasks referred were:

To repeat the other requests of all Committee members which appear elsewhere in the Minutes:

Presentations to the Committee
Juergen Wettig gave a presentation on mining - particularly cyanide - related regulatory developments in the E.U. which have been given impetus by the Baia Mare tailings and cyanide spill. The European Commission published a Communication on the safe operation of mining activities in October 2000, setting out three key actions (amendment of the Seveso II Directive to include mining activities involving dangerous substances, a new Directive on the management of mining waste, and the development of a Reference Document describing Best Available Techniques for tailings dam management). The Baia Mare Task Force published its Final Report in December 2000, containing numerous recommendations, such as strengthening emergency response planning, detoxification in plant before tailings deposition, and requirements for tailings management facilities to have adequate provision for emergency discharge and storage of excess water.

In discussion, it was noted that in developing the Code the Committee needed to be cognisant of the direction in which both regulation and expectations are moving in different parts of the world.

Stan Szymanski gave a presentation on key concepts and structural elements of Responsible Care of relevance to the Committee.

Other Business

• 10-11 May, Washington
  23-24 July, Vancouver
  15-16 October, Washington

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